ASML International N.V.
Annual Report 2014

Annual￿Report
2014

14

Form 20-F

United￿States
Securities￿and￿Exchange￿Commission
Washington, D.C. 20549
Form￿20-F
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
for the fiscal year ended December 31, 2014
Commission file number 025566
ASML HOLDING N.V.
(Exact￿Name￿of￿Registrant￿as￿Specified￿in￿Its￿Charter)
THE NETHERLANDS
(Jurisdiction￿of￿Incorporation￿or￿Organization)
DE RUN 6501
5504 DR VELDHOVEN
THE NETHERLANDS
(Address￿of￿Principal￿Executive￿Offices)
Craig DeYoung
Telephone: +1 480 696 2762
E-mail: craig.deyoung@asml.com
2650 W Geronimo Place
Chandler, AZ 85224, USA
(Name,￿Telephone,￿E-mail,￿and￿/￿or￿Facsimile￿number￿and￿Address￿of￿Company￿Contact￿Person)
Securities￿registered￿or￿to￿be￿registered￿pursuant￿to￿Section￿12(b)￿of￿the￿Act:

Title of each class
Ordinary￿Shares
(nominal￿value￿EUR￿0.09￿per￿share)

Name of each exchange on which registered
The￿NASDAQ￿Stock￿Market￿LLC

Securities￿registered￿or￿to￿be￿registered￿pursuant￿to￿Section￿12(g)￿of￿the￿Act:
None
(Title￿of￿Class)
Securities￿for￿which￿there￿is￿a￿reporting￿obligation￿pursuant￿to￿Section￿15(d)￿of￿the￿Act:
None
(Title￿of￿Class)
Indicate￿the￿number￿of￿outstanding￿shares￿of￿each￿of￿the￿issuer’s￿classes￿of
capital￿or￿common￿stock￿as￿of￿the￿close￿of￿the￿period￿covered￿by￿the￿annual￿report.
432,935,288 Ordinary Shares
(nominal value EUR 0.09 per share)
Indicate￿by￿check￿mark￿if￿the￿registrant￿is￿a￿well-known￿seasoned￿issuer,￿as￿defined￿in￿Rule￿405￿of￿the￿Securities￿Act.
Yes￿(x)￿No￿(￿)
If￿this￿report￿is￿an￿annual￿or￿transition￿report,￿indicate￿by￿check￿mark￿if￿the￿registrant
is￿not￿required￿to￿file￿reports￿pursuant￿to￿Section￿13￿or￿15(d)￿of￿the￿Securities￿Exchange￿Act￿of￿1934.
Yes￿(￿)￿No￿(x)
Indicate￿by￿check￿mark￿whether￿the￿registrant:￿(1)￿has￿filed￿all￿reports￿required￿to￿be￿filed￿by￿Section￿13￿or￿15(d)￿of￿the
Securities￿Exchange￿Act￿of￿1934￿during￿the￿preceding￿12￿months￿(or￿for￿such￿shorter￿period￿that￿the￿registrant
was￿required￿to￿file￿such￿reports),￿and￿(2)￿has￿been￿subject￿to￿such￿filing￿requirements￿for￿the￿past￿90￿days.
Yes￿(x)￿No￿(￿)
Indicate￿by￿check￿mark￿whether￿the￿registrant￿has￿submitted￿electronically
and￿posted￿on￿its￿corporate￿web￿site,￿if￿any,￿every￿Interactive
Data￿File￿required￿to￿be￿submitted￿and￿posted￿pursuant￿to￿Rule
405￿of￿Regulation￿S-T￿(§232.405￿of￿this￿chapter)￿during￿the
preceding￿12￿months￿(or￿for￿such￿shorter￿period￿that￿the￿registrant￿was￿required￿to￿submit￿and￿post￿such￿files).
Yes￿(x)￿No￿(￿)
Indicate￿by￿check￿mark￿whether￿the￿registrant￿is￿a￿large￿accelerated￿filer,￿an￿accelerated￿filer,￿or￿a￿non-accelerated￿filer.
See￿definition￿of￿"accelerated￿filer￿and￿large￿accelerated￿filer"￿in￿Rule￿12b-2￿of￿the￿Exchange￿Act.￿(Check￿one):
Large￿accelerated￿filer￿(x)￿Accelerated￿filer￿(￿)￿Non-accelerated￿filer￿(￿)
Indicate￿by￿check￿mark￿which￿basis￿of￿accounting￿the￿registrant￿has￿used￿to￿prepare
the￿financial￿statements￿included￿in￿this￿filing:
U.S.￿GAAP￿(x)￿International￿Financial￿Reporting￿Standards￿as￿issued￿by￿the
￿International￿Accounting￿Standards￿Board￿(￿)￿Other￿(￿)
If￿"Other"￿has￿been￿checked￿in￿response￿to￿the￿previous￿question,￿indicate￿by￿checkmark
which￿financial￿statement￿item￿the￿registrant￿has￿elected￿to￿follow.
Item￿17￿(￿)￿Item￿18(￿)
If￿this￿is￿an￿annual￿report,￿indicate￿by￿check￿mark￿whether￿the￿registrant￿is￿a
shell￿company￿(as￿defined￿in￿Rule￿12b-2￿of￿the￿Exchange￿Act)
Yes￿(￿)￿No￿(x)
Name￿and￿address￿of￿person￿authorized￿to￿receive￿notices￿and￿communications
from￿the￿Securities￿and￿Exchange￿Commission:
James A. McDonald
Skadden, Arps, Slate, Meagher & Flom (UK) LLP
40 Bank Street, Canary Wharf London E14 5DS England

ASML￿ANNUAL￿REPORT￿2014

Contents

Part I

1

1

1

14

21

21

34

41

44

44

Item 1 Identity of Directors, Senior Management and Advisors

Item 2 Offer Statistics and Expected Timetable

Item 3 Key Information
A.￿Selected￿Financial￿Data
B.￿Capitalization￿and￿Indebtedness
C.￿Reasons￿for￿the￿Offer￿and￿Use￿of￿Proceeds
D.￿Risk￿Factors

Item 4 Information on the Company
A.￿History￿and￿Development￿of￿the￿Company
B.￿Business￿Overview
C.￿Organizational￿Structure
D.￿Property,￿Plant￿and￿Equipment

Item 4A Unresolved Staff Comments

Item 5 Operating and Financial Review and Prospects  
Executive￿Summary
A.￿Operating￿Results
B.￿Liquidity￿and￿Capital￿Resources
C.￿Research￿and￿Development,￿Patents￿and￿Licenses,￿etc.
D.￿Trend￿Information
E.￿Off-Balance￿Sheet￿Arrangements
F.￿Tabular￿Disclosure￿of￿Contractual￿Obligations
G.￿Safe￿Harbor

Item 6 Directors, Senior Management and Employees
A.￿Directors￿and￿Senior￿Management
B.￿Compensation
C.￿Board￿Practices
D.￿Employees
E.￿Share￿Ownership

Item 7 Major Shareholders and Related Party Transactions
A.￿Major￿Shareholders
B.￿Related￿Party￿Transactions
C.￿Interests￿of￿Experts￿&￿Counsel

Item 8 Financial Information
A.￿Consolidated￿Statements￿and￿Other￿Financial￿Information
B.￿Significant￿Changes

Item 9 The Offer and Listing
A.￿Offer￿and￿Listing￿Details
B.￿Plan￿of￿Distribution
C.￿Markets
D.￿Selling￿Shareholders
E.￿Dilution
F.￿Expenses￿of￿the￿Issue

ASML￿ANNUAL￿REPORT￿2014

45

55

56

Item 10 Additional Information
A.￿Share￿Capital
B.￿Memorandum￿and￿Articles￿of￿Association
C.￿Material￿Contracts
D.￿Exchange￿Controls
E.￿Taxation
F.￿Dividends￿and￿Paying￿Agents
G.￿Statement￿by￿Experts
H.￿Documents￿on￿Display
I.￿Subsidiary￿Information

Item 11 Quantitative and Qualitative Disclosures About Market Risk

Item 12 Description of Securities Other Than Equity Securities

Part II

57

57

57

58

Item 13 Defaults, Dividend Arrearages and Delinquencies

Item 14 Material Modifications to the Rights of Security Holders and Use of Proceeds

Item 15 Controls and Procedures

Item 16   
A.￿Audit￿Committee￿Financial￿Expert
B.￿Code￿of￿Ethics
C.￿Principal￿Accountant￿Fees￿and￿Services
D.￿Exemptions￿from￿the￿Listing￿Standards￿for￿Audit￿Committees
E.￿Purchases￿of￿Equity￿Securities￿by￿the￿Issuer￿and￿Affiliated￿Purchasers
F.￿Change￿in￿Registrant’s￿Certifying￿Accountant
G.￿Corporate￿Governance
H.￿Mine￿Safety￿Disclosure

Part III

61

61

61

Item 17 Financial Statements

Item 18 Financial Statements

Item 19 Exhibits

ASML￿ANNUAL￿REPORT￿2014

ASML￿ANNUAL￿REPORT￿2014

Part I

Special Note Regarding Forward-Looking Statements

In￿addition￿to￿historical￿information,￿this￿Annual￿Report￿contains￿statements￿relating￿to￿our￿future￿business￿and/or
results.￿These￿statements￿include￿certain￿projections￿and￿business￿trends￿that￿are￿"forward-looking"￿within￿the￿meaning
of￿the￿Private￿Securities￿Litigation￿Reform￿Act￿of￿1995.￿You￿can￿generally￿identify￿these￿statements￿by￿the￿use￿of
words￿like￿"may",￿"will",￿"could",￿"should",￿"project",￿"believe",￿"anticipate",￿"expect",￿"plan",￿"estimate",￿"forecast",
"potential",￿"intend",￿"continue"￿and￿variations￿of￿these￿words￿or￿comparable￿words.￿They￿appear￿in￿a￿number￿of￿places
throughout￿this￿Annual￿Report￿and￿include￿statements￿with￿respect￿to￿our￿outlook,￿expected￿customer￿demand￿in
specified￿market￿segments,￿expected￿sales￿levels￿and￿trends,￿systems￿backlog,￿IC￿unit￿demand,￿expected￿financial
results,￿including￿expected￿gross￿margin￿and￿expenses,￿expected￿shipments￿of￿tools,￿productivity￿of￿our￿tools￿and
systems￿performance,￿including￿EUV￿system￿performance￿(such￿as￿endurance),￿the￿development￿of￿EUV￿technology￿and
the￿number￿of￿EUV￿systems￿expected￿to￿be￿shipped￿and￿recognized￿in￿revenue￿and￿timing￿of￿shipments,￿dividend￿policy
and￿intention￿to￿repurchase￿shares,￿purchase￿commitments￿and￿statements￿about￿our￿CCIP.

These￿forward-looking￿statements￿are￿not￿historical￿facts,￿but￿rather￿are￿based￿on￿current￿expectations,￿estimates,
assumptions￿and￿projections￿about￿the￿business￿and￿our￿future￿financial￿results￿and￿readers￿should￿not￿place￿undue
reliance￿on￿them.￿Forward-looking￿statements￿do￿not￿guarantee￿future￿performance,￿and￿actual￿results￿may￿differ
materially￿from￿projected￿results￿as￿a￿result￿of￿certain￿risks,￿and￿uncertainties.￿These￿risks￿and￿uncertainties￿include,
without￿limitation,￿those￿described￿under￿Item￿3.D.￿"Risk￿Factors".￿These￿forward-looking￿statements￿are￿made￿only￿as
of￿the￿date￿of￿this￿Annual￿Report.￿We￿do￿not￿undertake￿to￿update￿or￿revise￿the￿forward-looking￿statements,￿whether￿as￿a
result￿of￿new￿information,￿future￿events￿or￿otherwise.

Item 1 Identity of Directors, Senior Management and Advisors

Not￿applicable.

Item 2 Offer Statistics and Expected Timetable

Not￿applicable.

Item 3 Key Information

A. Selected Financial Data
The￿following￿selected￿consolidated￿financial￿data￿should￿be￿read￿in￿conjunction￿with￿Item￿5￿"Operating￿and￿Financial
Review￿and￿Prospects"￿and￿Item￿18￿"Financial￿Statements".

On￿May￿30,￿2013,￿we￿acquired￿100￿percent￿of￿the￿issued￿share￿capital￿of￿Cymer.￿Financial￿information￿presented￿in￿our
Annual￿Report￿includes￿Cymer￿from￿May￿30,￿2013￿onwards.

A￿summary￿of￿all￿abbreviations,￿technical￿terms￿and￿definitions￿(of￿capitalized￿terms)￿used￿in￿this￿Annual￿Report￿is￿set
forth￿on￿pages￿D-1￿through￿D-4.

ASML￿ANNUAL￿REPORT￿2014

1

Five-Year Financial Summary

Year ended December 31
(in thousands, except per share data)

2014
EUR

2013
EUR

2012
EUR

2011 1
EUR

2010
EUR

Consolidated Statements of Operations data
Net￿sales
Cost￿of￿sales

5,856,277
(3,259,903)

5,245,326
(3,068,064)

4,731,555
(2,726,298)

5,651,035
(3,201,645)

4,507,938
(2,552,768)

Gross profit
Other￿income
Research￿and￿development￿costs
Selling,￿general￿and￿administrative￿costs

2,596,374
81,006
(1,074,035)
(321,110)

2,177,262
64,456
(882,029)
(311,741)

2,005,257
-
(589,182)
(259,301)

2,449,390
-
(590,270)
(217,904)

Income from operations
Interest￿and￿other,￿net

1,282,235
(8,600)

1,047,948
(24,471)

1,156,774
(6,196)

1,641,216
7,419

Income before income taxes
Provision￿for￿income￿taxes

1,273,635
(76,995)

1,023,477
(7,987)

1,150,578
(4,262)

1,648,635
(181,675)

1,955,170
-
(523,426)
(181,045)

1,250,699
(8,176)

1,242,523
(220,703)

Net income

1,196,640

1,015,490

1,146,316

1,466,960

1,021,820

Earnings per share data
Basic￿net￿income￿per￿ordinary￿share
Diluted￿net￿income￿per￿ordinary￿share2

Number￿of￿ordinary￿shares￿used￿in
computing￿per￿share￿amounts￿(in￿thousands)
Basic
Diluted2

2.74
2.72

2.36
2.34

2.70
2.68

3.45
3.42

2.35
2.33

437,142
439,693

429,770
433,446

424,096
426,986

425,618
429,053

435,146
438,974

1

2

As￿of￿January￿1,￿2011,￿we￿adopted￿ASU￿2009-13￿"Sales￿Arrangements￿with￿Multiple￿Deliverables"￿which￿converted￿into￿ASC￿605-25￿"Revenue
Recognition￿-￿Multiple-Element￿Arrangements".￿The￿ASU￿was￿adopted￿prospectively￿and￿had￿an￿insignificant￿impact￿on￿timing￿and￿allocation￿of
revenues.
The￿calculation￿of￿diluted￿net￿income￿per￿ordinary￿share￿assumes￿the￿exercise￿of￿options￿issued￿under￿our￿stock￿option￿plans￿and￿the￿issuance￿of
shares￿under￿our￿share￿plans￿for￿periods￿in￿which￿exercises￿or￿issuances￿would￿have￿a￿dilutive￿effect.￿The￿calculation￿of￿diluted￿net￿income￿per
ordinary￿share￿does￿not￿assume￿exercise￿of￿such￿options￿or￿issuance￿of￿shares￿when￿such￿exercises￿or￿issuance￿would￿be￿anti-dilutive.

ASML￿ANNUAL￿REPORT￿2014

2

Five-Year Financial Summary

2014
EUR

2013
EUR

2012
EUR

2011 1
EUR

2010
EUR

As of December 31
(in thousands, unless otherwise indicated)
Consolidated Balance Sheets data
Cash￿and￿cash￿equivalents
Short-term￿investments
Working￿capital2

2,419,487
334,864
4,257,335
Total￿assets 12,203,945
1,154,137
7,512,590
39,426

Long-term￿debt￿(including￿the￿current￿portion￿of￿long-term￿debt)
Total￿shareholders’￿equity
Share￿capital

Consolidated Statements of Cash Flows data
Depreciation￿and￿amortization
Impairment
Net￿cash￿provided￿by￿operating￿activities
Purchase￿of￿property,￿plant￿and￿equipment3
Purchase￿of￿available￿for￿sale￿securities
Maturity￿of￿available￿for￿sale￿securities
Acquisition￿of￿subsidiary￿(net￿of￿cash￿acquired)
Net￿cash￿provided￿by￿(used￿in)￿investing￿activities
Net￿proceeds￿from￿issuance￿of￿shares
Capital￿repayment
Dividend￿paid
Deposits￿from￿customers
Purchase￿of￿shares
Net￿proceeds￿from￿issuance￿of￿notes
Repurchase￿of￿notes
Net￿cash￿provided￿by￿(used￿in)￿financing￿activities
Net￿increase￿(decrease)￿in￿cash￿and￿cash￿equivalents

254,644
10,528
1,025,206
(358,280)
(504,756)
849,776
-
(16,212)
39,679
-
(267,962)
-
(700,000)
-
-
(928,439)
88,793

2,330,694
679,884
4,156,917
11,513,730
1,074,570
6,922,427
40,092

1,767,596
930,005
3,745,559
7,410,478
759,490
4,066,893
37,470

228,775
13,057
1,054,173
(210,804)
(904,856)
1,195,031
(443,712) 4
(368,341)
31,822
-
(216,085)
-
(300,000)
740,445 7
(368,303) 8
(113,111)
563,098

186,620
3,234
703,478
(171,878)
(1,379,997)
449,992
(10,292)
(1,119,833)
3,907,666 5
(3,728,324) 6
(188,892)
-
(535,373)
-
-
(545,583)
(964,186)

2,731,782
-
3,473,767
7,260,815
736,368
3,444,154
38,354

165,185
12,272
2,070,440
(300,898)
-
-
-
(300,898)
34,084
-
(172,645)
(150,000)
(700,452)
-
-
(991,561)
781,948

1,949,834
-
2,787,220
6,180,358
710,060
2,773,908
39,293

151,444
8,563
940,048
(128,728)
-
-
-
(124,903)
31,000
-
(86,960)
150,000
-
-
-
92,702
912,760

Ratios and other data
Gross￿profit￿as￿a￿percentage￿of￿net￿sales
Income￿from￿operations￿as￿a￿percentage￿of￿net￿sales
Net￿income￿as￿a￿percentage￿of￿net￿sales
Shareholders’￿equity￿as￿a￿percentage￿of￿total￿assets
Income￿taxes￿as￿a￿percentage￿of￿income￿before￿income￿taxes
Sales￿of￿systems￿(in￿units)
ASP￿of￿system￿sales￿(in￿millions)
Value￿of￿systems￿backlog￿(in￿millions)
Systems￿backlog￿(in￿units)
ASP￿of￿systems￿backlog￿(in￿millions)
Value￿of￿booked￿systems￿(in￿millions)
Net￿bookings￿(in￿units)
ASP￿of￿booked￿systems￿(in￿millions)
Number￿of￿payroll￿employees￿(in￿FTEs)
Number￿of￿temporary￿employees￿(in￿FTEs)
Increase￿(decrease)￿net￿sales￿in￿percentage
Number￿of￿ordinary￿shares￿issued￿and￿outstanding￿(in￿thousands)
Closing￿ASML￿share￿price￿in￿EUR￿on￿Euronext￿Amsterdam
Volatility￿260￿days￿as￿percentage￿of￿our￿shares￿listed￿on￿Euronext
Amsterdam11
Closing￿ASML￿share￿price￿in￿USD￿on￿NASDAQ
Volatility￿260￿days￿as￿percentage￿of￿our￿shares￿listed￿on￿NASDAQ12
Dividend￿per￿ordinary￿share￿in￿EUR
Dividend￿per￿ordinary￿share￿in￿USD

44.3
21.9
20.4
61.6
6.0
136
31.2
2,772.4 9
82 9
33.8 9
4,902.2 9
157 9
31.2 9
11,318
2,754
11.6
432,935
89.50
27.49

41.5
20.0
19.4
60.1
0.8
157
25.4
1,953.3
56
34.9
4,644.0
166
28.0
10,360
2,865
10.9
440,852
68.04
23.98

42.4
24.4
24.2
54.9
0.4
170
22.4
1,214.1
46
26.4
3,312.3
144
23.0
8,497
2,139
(16.3)
407,165
48.00
28.64

107.83
26.01

0.70 13
0.79 13,14

93.70
24.01
0.61
0.84 15

64.39
30.05
0.53
0.69 15

43.3
29.0
26.0
47.4
11.0
222
22.0
1,732.5 10
71 10
24.4 10
2,909.3 10
134 10
21.7 10

7,955
1,935
25.4
413,669
32.48
32.46

41.79
41.83
0.46
0.61 15

43.4
27.7
22.7
44.9
17.8
197
19.8
3,855.7
157
24.6
6,212.7
285
21.8
7,184
2,061
182.4
436,593
28.90
30.25

38.34
35.25
0.40
0.58 15

1

As￿of￿January￿1,￿2011,￿we￿adopted￿ASU￿2009-13￿"Sales￿Arrangements￿with￿Multiple￿Deliverables"￿which￿converted￿into￿ASC￿605-25￿"Revenue
Recognition￿-￿Multiple-Element￿Arrangements".￿The￿ASU￿was￿adopted￿prospectively￿and￿had￿an￿insignificant￿impact￿on￿timing￿and￿allocation￿of
revenues.

2 Working￿capital￿is￿calculated￿as￿the￿difference￿between￿total￿current￿assets￿and￿total￿current￿liabilities.
3

An￿amount￿of￿EUR￿95.5￿million￿(2013:￿EUR￿115.9￿million,￿2012:￿EUR￿204.8￿million,￿2011:￿EUR￿300.5￿million,￿2010:￿EUR￿214.1￿million)￿of￿the￿additions
in￿property,￿plant￿and￿equipment￿relates￿to￿non-cash￿transfers￿from￿inventory,￿other￿movements￿include￿EUR￿1.5￿million￿increase￿(2013:￿EUR￿12.5
million￿decrease,￿2012:￿EUR￿9.6￿million￿decrease,￿2011:￿EUR￿17.7￿million￿decrease￿and￿2010:￿EUR￿nil￿million),￿mainly￿relating￿to￿investments￿not￿yet
paid￿and￿inceptions￿of￿finance￿lease￿arrangements.￿Since￿the￿transfers￿between￿inventory￿and￿property,￿plant￿and￿equipment￿are￿non-cash￿events,
these￿are￿not￿reflected￿in￿the￿Consolidated￿Statements￿of￿Cash￿Flows￿data.￿For￿further￿details￿see￿Note￿12￿to￿the￿Financial￿Statements.
In￿addition￿to￿the￿cash￿paid￿in￿relation￿to￿the￿acquisition￿of￿Cymer,￿we￿issued￿36,464,576￿shares￿for￿an￿amount￿of￿EUR￿2,346.7￿million￿(non-cash
event)￿as￿part￿of￿the￿consideration￿paid.
Net￿proceeds￿from￿issuance￿of￿shares￿includes￿an￿amount￿of￿EUR￿3,853.9￿million￿related￿to￿the￿share￿issuances￿in￿connection￿to￿the￿CCIP.￿See￿Note
28￿to￿the￿Financial￿Statements.
The￿difference￿of￿EUR￿125.6￿million￿between￿the￿capital￿repayment￿of￿EUR￿3,728.3￿million￿and￿the￿net￿proceeds￿from￿issuance￿of￿shares￿of￿EUR
3,853.9￿million￿relates￿to￿the￿capital￿repayment￿on￿ASML's￿treasury￿shares￿which￿was￿part￿of￿the￿synthetic￿share￿buyback￿in￿November￿2012.
Net￿proceeds￿from￿issuance￿of￿notes￿relate￿to￿the￿total￿cash￿proceeds￿of￿EUR￿740.4￿million￿(net￿of￿incurred￿transaction￿costs)￿from￿the￿issuance￿of
our￿EUR￿750￿million￿3.375￿percent￿senior￿notes￿due￿2023.
Repurchase￿of￿notes￿relates￿to￿the￿net￿cash￿outflows￿of￿EUR￿368.3￿million￿for￿the￿partial￿repurchase￿of￿our￿EUR￿600￿million￿5.75￿percent￿senior￿notes
due￿2017￿including￿the￿partial￿unwinding￿of￿the￿related￿interest￿rate￿swaps.

4

5

6

7

8

ASML￿ANNUAL￿REPORT￿2014

3

9

Our￿systems￿backlog￿and￿net￿bookings￿include￿sales￿orders￿for￿which￿written￿authorizations￿have￿been￿accepted￿and￿shipment￿and/or￿revenue
recognition￿is￿expected￿within￿12￿months.￿As￿of￿2014￿we￿also￿include￿EUV￿in￿our￿backlog￿starting￿with￿our￿NXE:3350B￿systems.￿As￿a￿result,￿two
NXE:3350B￿systems￿are￿now￿included￿in￿our￿systems￿backlog￿and￿net￿bookings.￿Before￿2014,￿our￿systems￿backlog￿and￿net￿bookings￿include￿only
sales￿orders￿for￿which￿written￿authorizations￿have￿been￿accepted￿and￿system￿shipment￿and￿revenue￿recognition￿dates￿within￿the￿following￿12￿months
have￿been￿assigned.￿This￿change￿has￿no￿impact￿on￿the￿comparative￿figures.

10 From￿January￿1,￿2011,￿we￿value￿our￿net￿bookings￿and￿systems￿backlog￿at￿system￿sales￿value￿including￿factory￿options.￿Prior￿to￿January￿1,￿2011,￿we

valued￿net￿bookings￿and￿systems￿backlog￿at￿full￿order￿value￿(i.e.￿including￿factory￿options,￿field￿options￿and￿services).￿The￿comparative￿figures￿for
prior￿periods￿have￿not￿been￿adjusted￿because￿the￿impact￿on￿the￿comparative￿figures￿is￿insignificant￿(approximately￿EUR￿20.0￿million￿negative￿impact
on￿backlog￿value￿as￿of￿December￿31,￿2010).

11 Volatility￿represents￿the￿variability￿in￿our￿share￿price￿on￿Euronext￿Amsterdam￿as￿measured￿over￿the￿260￿business￿days￿of￿each￿year￿presented￿(source:

Bloomberg￿Finance￿LP).

12 Volatility￿represents￿the￿variability￿in￿our￿share￿price￿on￿NASDAQ￿as￿measured￿over￿the￿260￿business￿days￿of￿each￿year￿presented￿(source:￿Bloomberg

Finance￿LP).

13 Subject￿to￿approval￿of￿the￿AGM￿to￿be￿held￿on￿April￿22,￿2015.
14 The￿exchange￿rate￿used￿to￿express￿the￿proposed￿dividend￿per￿ordinary￿share￿in￿USD￿is￿the￿exchange￿rate￿of￿USD/EUR￿1.13￿as￿of￿January￿30,￿2015.
15 The￿dividends￿per￿ordinary￿share￿in￿USD￿for￿the￿years￿2010,￿2011,￿2012￿and￿2013￿have￿been￿adjusted￿compared￿to￿the￿respective￿Annual￿Reports￿to

reflect￿the￿actual￿exchange￿rates￿at￿time￿of￿dividend￿payment.

ASML￿ANNUAL￿REPORT￿2014

4

Exchange Rate Information 
We￿publish￿our￿Financial￿Statements￿in￿euro.￿A￿portion￿of￿our￿assets,￿liabilities,￿net￿sales￿and￿costs￿is,￿and￿historically
has￿been,￿denominated￿in￿currencies￿other￿than￿the￿euro.￿For￿a￿discussion￿of￿the￿impact￿of￿exchange￿rate￿fluctuations
on￿our￿financial￿condition￿and￿results￿of￿operations,￿see￿Item￿5.A.￿"Operating￿Results￿-￿Foreign￿Exchange￿Management".

The￿following￿are￿the￿Noon￿Buying￿Rates￿certified￿by￿the￿Federal￿Reserve￿Bank￿for￿customs￿purposes,￿expressed￿in￿U.S.
dollars￿per￿euro.

Calendar year

2015
(through January 31, 2015)

Period￿End
Period￿Average￿1
Period￿High
Period￿Low

1.13
1.16
1.20
1.13

2014

1.21
1.33
1.39
1.21

2013

1.38
1.33
1.38
1.28

2012

1.32
1.29
1.35
1.21

2011

1.30
1.40
1.49
1.29

1

The￿average￿of￿the￿Noon￿Buying￿Rates￿on￿the￿last￿business￿day￿of￿each￿month￿during￿the￿period￿presented.

Months of

Period￿High
Period￿Low

January
2015

December
2014

November
2014

October
2014

September
2014

1.20
1.13

1.25
1.21

1.26
1.24

1.28
1.25

1.31
1.26

2010

1.33
1.33
1.45
1.20

August
2014

1.34
1.32

B. Capitalization and Indebtedness
Not￿applicable.

C. Reasons for the Offer and Use of Proceeds
Not￿applicable.

D. Risk Factors
In￿conducting￿our￿business,￿we￿face￿many￿risks￿that￿may￿interfere￿with￿our￿business￿objectives.￿Some￿of￿these￿risks
relate￿to￿our￿operational￿processes,￿while￿others￿relate￿to￿our￿business￿environment.￿It￿is￿important￿to￿understand￿the
nature￿of￿these￿risks￿and￿the￿impact￿they￿may￿have￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.￿Some
of￿the￿more￿relevant￿risks￿are￿described￿below.￿These￿risks￿are￿not￿the￿only￿ones￿that￿we￿face.￿Some￿risks￿may￿not￿yet
be￿known￿to￿us￿and￿certain￿risks￿that￿we￿do￿not￿currently￿believe￿to￿be￿material￿could￿become￿material￿in￿the￿future.

Risks￿Related￿to￿the￿Semiconductor￿Industry

The Semiconductor Industry Is Highly Cyclical and We May Be Adversely Affected by Any Downturn
As￿a￿supplier￿to￿the￿global￿semiconductor￿industry,￿we￿are￿subject￿to￿the￿industry's￿business￿cycles,￿of￿which￿the￿timing,
duration￿and￿volatility￿are￿difficult￿to￿predict.￿The￿semiconductor￿industry￿has￿historically￿been￿cyclical.￿Sales￿of￿our
lithography￿systems￿depend￿in￿large￿part￿upon￿the￿level￿of￿capital￿expenditures￿by￿semiconductor￿manufacturers.￿These
capital￿expenditures￿depend￿upon￿a￿range￿of￿competitive￿and￿market￿factors,￿including:
• The￿current￿and￿anticipated￿market￿demand￿for￿semiconductors￿and￿for￿products￿utilizing￿semiconductors;
• Semiconductor￿prices;
• Semiconductor￿production￿costs￿and￿manufacturing￿capacity￿utilization￿for￿semiconductors;
• Semiconductor￿equipment￿industry￿capacity;
• Changes￿in￿semiconductor￿inventory￿levels;
• General￿economic￿conditions;￿and
• Access￿to￿capital.

Reductions￿or￿delays￿in￿capital￿equipment￿purchases￿by￿our￿customers￿could￿have￿a￿material￿adverse￿effect￿on￿our
business,￿financial￿condition￿and￿results￿of￿operations.

ASML￿ANNUAL￿REPORT￿2014

5

In￿an￿industry￿downturn,￿our￿ability￿to￿maintain￿profitability￿will￿depend￿substantially￿on￿whether￿we￿are￿able￿to￿lower
our￿costs￿and￿break-even￿level,￿which￿is￿the￿level￿of￿sales￿that￿we￿must￿reach￿in￿a￿year￿to￿achieve￿positive￿net￿income.
If￿sales￿decrease￿significantly￿as￿a￿result￿of￿an￿industry￿downturn￿and￿we￿are￿unable￿to￿adjust￿our￿costs￿over￿the￿same
period,￿our￿net￿income￿may￿decline￿significantly￿or￿we￿may￿suffer￿losses.￿As￿we￿need￿to￿keep￿certain￿levels￿of￿inventory
on￿hand￿to￿meet￿anticipated￿product￿and￿service￿demand,￿we￿may￿also￿incur￿increased￿costs￿related￿to￿inventory
obsolescence￿in￿an￿industry￿downturn,￿and￿such￿inventory￿obsolescence￿costs￿may￿be￿higher￿with￿our￿newer￿technology
systems￿such￿as￿EUV.￿In￿addition,￿industry￿downturns￿generally￿result￿in￿overcapacity,￿resulting￿in￿downward￿pressure
on￿sales￿prices￿and￿impairment￿of￿machinery￿and￿equipment,￿which￿in￿the￿past￿has￿had,￿and￿in￿the￿future￿could￿have,￿a
material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

The￿financial￿crises￿that￿affected￿the￿international￿banking￿system￿and￿global￿financial￿markets￿in￿2008-2009￿have￿been
in￿many￿respects￿unprecedented￿and￿international￿financial￿markets￿and￿the￿global￿economy￿have￿remained￿volatile.
Instability￿of￿the￿financial￿markets￿and￿the￿global￿economy￿in￿general￿can￿have￿a￿number￿of￿effects￿on￿our￿business,
including￿(i)￿declining￿business￿and￿consumer￿confidence￿resulting￿in￿reduced,￿or￿delayed￿purchase￿of￿our￿products
or￿shorter-term￿capital￿expenditures￿for￿our￿products;￿insolvency￿of￿key￿suppliers￿resulting￿in￿product￿delays,￿(ii)￿an
inability￿of￿customers￿to￿obtain￿credit￿to￿finance￿purchases￿of￿our￿products,￿delayed￿payments￿from￿our￿customers
and/or￿customer￿insolvencies￿and￿(iii)￿other￿adverse￿effects￿that￿we￿cannot￿currently￿anticipate.￿If￿global￿economic￿and
market￿conditions￿deteriorate,￿we￿are￿likely￿to￿experience￿material￿adverse￿impacts￿on￿our￿business,￿financial￿condition
and￿results￿of￿operations.

Conversely,￿in￿anticipation￿of￿periods￿of￿increasing￿demand￿for￿semiconductor￿manufacturing￿equipment,￿we￿must
maintain￿sufficient￿manufacturing￿capacity￿and￿inventory￿and￿we￿must￿attract,￿hire,￿integrate￿and￿retain￿a￿sufficient
number￿of￿qualified￿employees￿to￿meet￿customer￿demand.￿Our￿ability￿to￿predict￿the￿timing￿and￿magnitude￿of￿industry
fluctuations￿is￿limited￿and￿our￿products￿require￿significant￿lead-time￿to￿successfully￿complete.￿Accordingly,￿we￿may￿not
be￿able￿to￿effectively￿increase￿our￿production￿capacity￿to￿respond￿to￿an￿increase￿in￿customer￿demand￿in￿an￿industry
upturn￿resulting￿in￿lost￿sales,￿damage￿to￿customer￿relationships￿and￿we￿may￿lose￿market￿share.

Our Business Will Suffer If We or the Industry Do Not Respond Rapidly to Commercial and Technological
Changes in the Semiconductor Industry
The￿semiconductor￿manufacturing￿industry￿is￿subject￿to:
• Rapid￿change￿towards￿more￿complex￿technologies;
• Frequent￿new￿product￿introductions￿and￿enhancements;
• Evolving￿industry￿standards;
• Changes￿in￿customer￿requirements;￿and
• Shorter￿product￿life￿cycles.

Our￿products￿could￿become￿obsolete￿sooner￿than￿anticipated￿because￿of￿a￿faster￿than￿anticipated￿change￿in￿one￿or
more￿of￿the￿technologies￿related￿to￿our￿products￿or￿in￿market￿demand￿for￿products￿based￿on￿a￿particular￿technology.
Our￿success￿in￿developing￿new￿products￿and￿in￿enhancing￿our￿existing￿products￿depends￿on￿a￿variety￿of￿factors,
including￿the￿successful￿management￿of￿our￿R&D￿programs￿and￿the￿timely￿completion￿of￿product￿development￿and
design￿relative￿to￿competitors.￿If￿we￿do￿not￿develop￿and￿introduce￿new￿and￿enhanced￿systems￿at￿competitive￿prices￿and
on￿a￿timely￿basis,￿our￿customers￿will￿not￿integrate￿our￿systems￿into￿the￿planning￿and￿design￿of￿new￿production￿facilities
and￿upgrades￿of￿existing￿facilities,￿which￿would￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and
results￿of￿operations.

In￿particular,￿we￿are￿investing￿considerable￿financial￿and￿other￿resources￿to￿develop￿and￿introduce￿new￿products
and￿product￿enhancements,￿such￿as￿Dry,￿Immersion,￿EUV￿and￿Holistic￿Lithography.￿If￿we￿or￿our￿suppliers￿are￿unable
to￿successfully￿develop￿and￿introduce￿these￿products￿and￿technologies,￿or￿if￿our￿customers￿do￿not￿fully￿adopt￿the
new￿technologies,￿products￿or￿product￿enhancements￿due￿to￿a￿preference￿for￿more￿established￿or￿alternative￿new
technologies￿and￿products,￿due￿to￿the￿failure￿to￿meet￿their￿development￿roadmaps￿which￿require￿our￿new￿technology￿or
for￿any￿other￿reason,￿we￿may￿not￿recoup￿all￿of￿our￿investments￿in￿these￿technologies￿or￿products,￿which￿could￿have￿a
material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

ASML￿ANNUAL￿REPORT￿2014

6

The￿success￿of￿EUV,￿which￿we￿believe￿is￿critical￿for￿keeping￿pace￿with￿Moore's￿Law,￿which￿postulates￿that￿the￿number
of￿transistors￿on￿a￿chip￿doubles￿approximately￿every￿18￿to￿24￿months￿at￿equivalent￿costs,￿remains￿dependent￿on
continuing￿technical￿advances￿by￿us￿and￿our￿suppliers,￿particularly￿with￿respect￿to￿technology￿related￿to￿the￿light
source,￿source￿power,￿system￿availability,￿and￿scanner￿performance,￿without￿which￿EUV￿tools￿cannot￿achieve￿the
productivity￿and￿yield￿required￿to￿economically￿justify￿the￿higher￿price￿of￿these￿tools.￿A￿delay￿in￿the￿developments￿of
these￿tools￿or￿a￿delay￿in￿such￿tools￿meeting￿production￿requirements￿could￿discourage￿or￿result￿in￿much￿slower￿adoption
of￿this￿EUV￿technology￿and￿could￿delay￿purchases￿of￿these￿tools.￿In￿addition,￿the￿introduction￿of￿alternative￿technologies
or￿processes￿by￿our￿competitors￿that￿compete￿with￿EUV￿could￿discourage￿or￿result￿in￿much￿slower￿adoption￿of￿EUV
technology.￿If￿the￿technologies￿that￿we￿pursue￿to￿assist￿our￿customers￿in￿producing￿smaller￿and￿more￿efficient￿chips￿are
not￿as￿effective￿as￿those￿developed￿by￿our￿competitors,￿or￿if￿our￿customers￿adopt￿new￿technological￿architectures￿that
are￿less￿focused￿on￿lithography,￿this￿may￿adversely￿affect￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

We Face Intense Competition
The￿semiconductor￿equipment￿industry￿is￿highly￿competitive.￿The￿principal￿elements￿of￿competition￿in￿our￿market￿are:
• The￿technical￿performance￿characteristics￿of￿a￿lithography￿system;
• The￿value￿of￿ownership￿of￿that￿system￿based￿on￿its￿purchase￿price,￿maintenance￿costs,￿productivity,￿and￿customer

service￿and￿support￿costs;

• The￿exchange￿rate￿of￿the￿euro,￿particularly￿against￿the￿Japanese￿yen-￿strengthening￿of￿the￿euro￿against￿the￿yen￿could

result￿in￿a￿loss￿of￿market￿share;

• The￿relative￿strength￿and￿breadth￿of￿our￿portfolio￿of￿patents￿and￿other￿intellectual￿property￿rights;￿and
• Our￿customers’￿desire￿to￿obtain￿lithography￿equipment￿from￿more￿than￿one￿supplier.

Our￿competitiveness￿increasingly￿depends￿upon￿our￿ability￿to￿develop￿new￿and￿enhanced￿semiconductor￿equipment
that￿is￿competitively￿priced￿and￿introduced￿on￿a￿timely￿basis,￿as￿well￿as￿our￿ability￿to￿protect￿and￿defend￿our￿intellectual
property￿rights.￿See￿Item￿4.B.￿"Business￿Overview￿-￿Intellectual￿Property",￿and￿Note￿19￿to￿the￿Financial￿Statements.

We￿compete￿primarily￿with￿Nikon￿and￿Canon.￿Both￿Nikon￿and￿Canon￿have￿substantial￿financial￿resources￿and￿broad
patent￿portfolios.￿Each￿continues￿to￿introduce￿new￿products￿with￿improved￿price￿and￿performance￿characteristics￿that
compete￿directly￿with￿our￿products,￿which￿may￿cause￿a￿decline￿in￿our￿sales￿or￿a￿loss￿of￿market￿acceptance￿for￿our
lithography￿systems.￿In￿addition,￿adverse￿market￿conditions,￿industry￿overcapacity￿or￿a￿decrease￿in￿the￿value￿of￿the
Japanese￿yen￿in￿relation￿to￿the￿euro￿or￿the￿U.S.￿dollar,￿could￿further￿intensify￿price-based￿competition￿in￿those￿regions
that￿account￿for￿the￿majority￿of￿our￿sales,￿resulting￿in￿lower￿prices￿and￿margins￿which￿could￿have￿a￿material￿adverse
effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

In￿addition￿to￿competitors￿in￿lithography,￿we￿may￿face￿competition￿with￿respect￿to￿alternative￿technologies￿for￿the￿non-
critical￿layers￿or￿for￿all￿layers.￿If￿we￿fail￿to￿keep￿pace￿with￿Moore’s￿Law￿or￿in￿the￿event￿the￿delivery￿of￿new￿technology￿is
delayed,￿our￿customers￿may￿opt￿for￿other￿solutions￿in￿IC￿manufacturing￿as￿a￿substitute￿for￿purchasing￿our￿products.

In￿the￿future￿the￿IC￿industry￿may￿not￿find￿it￿economically￿or￿technically￿feasible￿to￿maintain￿the￿pace￿of￿Moore's￿Law
through￿the￿use￿of￿lithography￿systems,￿which￿could￿result￿in￿our￿customers￿choosing￿solutions￿other￿than￿lithography
for￿IC￿manufacturing.￿In￿addition,￿if￿the￿pace￿of￿Moore’s￿Law￿is￿not￿maintained,￿this￿could￿also￿result￿in￿the￿IC￿industry
utilizing￿fewer￿leading￿technology￿systems,￿which￿could￿result￿in￿lower￿sales￿and￿margins.

Risks￿Related￿to￿ASML

The Number of Systems We Can Produce Is Limited by Our Dependence on a Limited Number of Suppliers of Key
Components
We￿rely￿on￿outside￿vendors￿for￿components￿and￿subassemblies￿used￿in￿our￿systems￿including￿the￿design￿thereof,￿each
of￿which￿is￿obtained￿from￿a￿single￿supplier￿or￿a￿limited￿number￿of￿suppliers.￿Our￿reliance￿on￿a￿limited￿group￿of￿suppliers
involves￿several￿risks,￿including￿a￿potential￿inability￿to￿obtain￿an￿adequate￿supply￿of￿required￿components,￿reduced
control￿over￿pricing￿and￿the￿risk￿of￿untimely￿delivery￿of￿these￿components￿and￿subassemblies.

ASML￿ANNUAL￿REPORT￿2014

7

The￿number￿of￿lithography￿systems￿we￿are￿able￿to￿produce￿may￿be￿limited￿by￿the￿production￿capacity￿of￿Zeiss.
Zeiss￿is￿our￿single￿supplier￿of￿lenses,￿mirrors,￿collectors￿and￿other￿critical￿optical￿components￿(which￿we￿refer￿to￿as
optics).￿If￿Zeiss￿were￿unable￿to￿maintain￿and￿increase￿production￿levels￿or￿if￿we￿are￿unable￿to￿maintain￿our￿business
relationship￿with￿Zeiss￿in￿the￿future￿we￿could￿be￿unable￿to￿fulfill￿orders,￿which￿could￿damage￿relationships￿with￿current
and￿prospective￿customers￿and￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of
operations.￿If￿Zeiss￿were￿to￿terminate￿its￿relationship￿with￿us￿or￿if￿Zeiss￿were￿unable￿to￿maintain￿production￿of￿optics
over￿a￿prolonged￿period,￿we￿would￿effectively￿cease￿to￿be￿able￿to￿conduct￿our￿business.￿See￿Item￿4.B.￿"Business
Overview￿-￿Manufacturing,￿Logistics￿and￿Suppliers".￿In￿addition￿to￿Zeiss'￿current￿position￿as￿a￿supplier￿of￿optics,￿a
number￿of￿other￿critical￿components￿such￿as￿drive￿lasers￿included￿in￿our￿CO2￿lasers￿used￿in￿our￿EUV￿systems￿are
available￿from￿only￿a￿limited￿number￿of￿suppliers.

Designing￿and￿manufacturing￿some￿of￿these￿components￿and￿subassemblies￿that￿we￿use￿in￿our￿manufacturing
processes￿is￿an￿extremely￿complex￿process￿and￿could￿result￿in￿delays￿by￿our￿suppliers.￿A￿prolonged￿inability￿to￿obtain
adequate￿deliveries￿of￿components￿or￿subassemblies,￿or￿any￿other￿circumstance￿that￿requires￿us￿to￿seek￿alternative
sources￿of￿supply,￿could￿significantly￿hinder￿our￿ability￿to￿deliver￿our￿products￿in￿a￿timely￿manner,￿which￿could￿damage
relationships￿with￿current￿and￿prospective￿customers￿and￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial
condition￿and￿results￿of￿operations.

In￿addition,￿as￿we￿develop￿new￿technologies,￿such￿as￿EUV,￿this￿requires￿our￿suppliers￿to￿participate￿in￿the￿development
process￿so￿that￿the￿components￿they￿supply￿will￿meet￿the￿requirements￿of￿our￿development￿roadmap,￿and￿this￿may
require￿significant￿R&D￿spending￿on￿the￿part￿of￿our￿suppliers.￿If￿our￿suppliers￿are￿unable￿to￿maintain￿their￿development
roadmap￿in￿line￿with￿ours,￿this￿may￿delay￿the￿development￿and￿introduction￿of￿new￿products.￿In￿addition,￿our￿suppliers
may￿not￿have￿or￿may￿not￿be￿willing￿to￿spend￿sufficient￿financial￿resources￿to￿make￿the￿necessary￿R&D￿expenditures￿to
enable￿them￿(and￿therefore￿us)￿to￿continue￿development￿roadmaps.￿In￿this￿case,￿we￿may￿be￿required￿to￿co-invest￿with
our￿suppliers￿to￿continue￿the￿R&D￿required￿to￿continue￿development￿roadmaps.

A High Percentage of Net Sales is Derived From a Few Customers
Historically,￿we￿have￿sold￿a￿substantial￿number￿of￿lithography￿systems￿to￿a￿limited￿number￿of￿customers.￿We￿expect
customer￿concentration￿to￿increase￿because￿of￿continuing￿consolidation￿in￿the￿semiconductor￿manufacturing￿industry.
Consequently,￿while￿the￿identity￿of￿our￿largest￿customers￿may￿vary￿from￿year￿to￿year,￿sales￿may￿remain￿concentrated
among￿relatively￿few￿customers￿in￿any￿particular￿year.￿In￿2014,￿recognized￿sales￿to￿our￿largest￿customer￿accounted￿for
EUR￿1,532.1￿million,￿or￿26.2￿percent￿of￿net￿sales,￿compared￿with￿EUR￿2,058.6￿million,￿or￿39.2￿percent￿of￿net￿sales,￿in
2013.￿The￿loss￿of￿any￿significant￿customer￿or￿any￿significant￿reduction￿in￿orders￿by￿a￿significant￿customer￿may￿have￿a
material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

Additionally,￿as￿a￿result￿of￿our￿limited￿number￿of￿customers,￿credit￿risk￿on￿our￿receivables￿is￿concentrated.￿Our￿three
largest￿customers￿(based￿on￿net￿sales)￿accounted￿for￿EUR￿643.2￿million,￿or￿49.3￿percent￿of￿accounts￿receivable￿and
finance￿receivables￿on￿December￿31,￿2014,￿compared￿with￿EUR￿861.4￿million,￿or￿73.3￿percent￿on￿December￿31,￿2013.
As￿a￿result,￿business￿failure￿or￿insolvency￿of￿one￿of￿our￿main￿customers￿may￿have￿a￿material￿adverse￿effect￿on￿our
business,￿financial￿condition￿and￿results￿of￿operations.

We Derive Most of Our Revenues From the Sale of a Relatively Small Number of Products
We￿derive￿most￿of￿our￿revenues￿from￿the￿sale￿of￿a￿relatively￿small￿number￿of￿lithography￿equipment￿systems￿(136￿units￿in
2014￿and￿157￿units￿in￿2013),￿with￿an￿ASP￿per￿system￿in￿2014￿of￿EUR￿31.2￿million￿(EUR￿35.6￿million￿for￿new￿systems￿and
EUR￿5.8￿million￿for￿used￿systems)￿and￿an￿ASP￿per￿system￿in￿2013￿of￿EUR￿25.4￿million￿(EUR￿27.4￿million￿for￿new￿systems
and￿EUR￿6.9￿million￿for￿used￿systems).￿As￿a￿result,￿the￿timing￿of￿recognition￿of￿revenue￿for￿a￿particular￿reporting￿period
from￿a￿small￿number￿of￿system￿sales￿may￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results
of￿operations￿in￿that￿period.￿Specifically,￿the￿failure￿to￿receive￿anticipated￿orders,￿or￿delays￿in￿shipments￿near￿the￿end￿of
a￿particular￿reporting￿period,￿due,￿for￿example,￿to:
• A￿downturn￿in￿the￿highly￿cyclical￿semiconductor￿industry;
• Volatility￿in￿the￿Logic￿and￿Memory￿end-markets￿as￿a￿result￿of￿oversupply￿and￿undersupply;
• Shipment￿rescheduling;
• Cancellation￿or￿order￿push-back￿by￿customers;
• Unexpected￿manufacturing￿difficulties;￿or
• Delays￿in￿deliveries￿by￿suppliers

may￿cause￿net￿sales￿in￿a￿particular￿reporting￿period￿to￿fall￿significantly￿below￿net￿sales￿in￿previous￿periods￿or￿below￿our
expected￿net￿sales,￿and￿may￿have￿a￿material￿adverse￿effect￿on￿our￿results￿of￿operations￿for￿that￿period.￿In￿particular,￿our
published￿quarterly￿earnings￿may￿vary￿significantly￿from￿quarter￿to￿quarter￿and￿may￿vary￿in￿the￿future￿and￿reduce￿our
visibility￿on￿future￿sales￿for￿the￿reasons￿discussed￿above.

ASML￿ANNUAL￿REPORT￿2014

8

The Time Window for New Product Introduction is Shorter and is Accompanied by Potential Design and
Production Delays and by Significant Costs
The￿development￿and￿initial￿production,￿installation￿and￿enhancement￿of￿the￿systems￿we￿produce￿is￿often￿accompanied
by￿design￿and￿production￿delays￿and￿related￿costs￿of￿a￿nature￿typically￿associated￿with￿the￿introduction￿and￿transition
to￿full-scale￿manufacturing￿of￿complex￿capital￿equipment.￿While￿we￿expect￿and￿plan￿for￿a￿corresponding￿learning-curve
effect￿in￿our￿product￿development￿cycle,￿we￿cannot￿predict￿with￿precision￿the￿time￿and￿expense￿required￿to￿overcome
these￿initial￿problems￿and￿to￿ensure￿full￿performance￿to￿specifications.￿Moreover,￿we￿anticipate￿that￿this￿learning-
curve￿effect￿will￿continue￿to￿present￿increasingly￿difficult￿challenges￿with￿each￿new￿generation￿of￿our￿products￿as￿a
result￿of￿increasing￿technological￿complexity.￿In￿particular,￿the￿development￿of￿an￿EUV￿volume￿production￿system￿is
dependent￿on,￿and￿subject￿to￿the￿successful￿implementation￿of,￿among￿other￿things,￿technology￿related￿to￿the￿light
source,￿source￿power,￿system￿availability,￿scanner￿performance￿and￿other￿technologies￿specific￿to￿EUV.￿There￿is￿a￿risk
that￿we￿may￿not￿be￿able￿to￿introduce￿or￿bring￿to￿full-scale￿production￿new￿products￿as￿quickly￿as￿we￿anticipate￿in￿our
product￿introduction￿plans,￿which￿could￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results
of￿operations.

For￿the￿market￿to￿accept￿technology￿enhancements,￿our￿customers,￿in￿many￿cases,￿must￿upgrade￿their￿existing
technology￿capabilities.￿Such￿upgrades￿from￿established￿technology￿may￿not￿be￿available￿to￿our￿customers￿to￿enable
volume￿production￿using￿our￿new￿technology￿enhancements.￿This￿could￿result￿in￿our￿customers￿not￿purchasing,￿or
pushing￿back￿or￿canceling￿orders￿for￿our￿technology￿enhancements,￿which￿could￿negatively￿impact￿our￿business,
financial￿condition￿and￿results￿of￿operations.

We￿are￿also￿dependent￿on￿our￿suppliers￿to￿maintain￿their￿development￿roadmaps￿to￿enable￿us￿to￿introduce￿new
technologies￿on￿a￿timely￿basis,￿and￿if￿they￿are￿unable￿to￿keep￿pace￿whether￿due￿to￿technological￿factors,￿lack￿of
financial￿resources￿or￿otherwise,￿this￿could￿prevent￿us￿from￿meeting￿our￿development￿roadmaps.

Additionally,￿in￿connection￿with￿our￿EUV￿production,￿we￿have￿made￿advanced￿payments￿to￿suppliers￿that￿we￿may￿not
recoup￿if￿we￿do￿not￿reach￿expected￿EUV￿sales￿levels￿in￿the￿future.￿We￿may￿make￿similar￿advance￿payments￿(or￿other
investments￿in￿our￿suppliers)￿to￿suppliers￿in￿connection￿with￿EUV￿or￿other￿technologies￿we￿develop,￿and￿we￿may￿not
recoup￿those￿advanced￿payments￿or￿other￿investments￿(e.g.￿if￿expected￿sales￿are￿not￿met).￿See￿Note￿9￿to￿our￿Financial
Statements.

As Lithography Technologies Become More Complex, the Success of Our R&D Programs Becomes More
Uncertain and More Expensive
Our￿lithography￿systems￿have￿become￿increasingly￿complex,￿and￿accordingly,￿the￿costs￿to￿develop￿new￿products￿and
technologies￿have￿increased,￿and￿we￿expect￿such￿costs￿to￿continue￿to￿increase.￿This￿increase￿in￿costs￿requires￿us￿to
continue￿obtaining￿sufficient￿funding￿for￿our￿R&D￿programs.￿For￿example,￿we￿obtained￿partial￿funding￿for￿our￿EUV￿R&D
program￿through￿the￿CCIP.￿We￿may￿however,￿be￿unable￿to￿obtain￿this￿type￿of￿funding￿from￿customers￿in￿the￿future,
in￿which￿case￿we￿may￿be￿unable￿to￿fund￿R&D￿investments￿necessary￿to￿maintain￿our￿technological￿leadership.￿The
increasing￿complexity￿of￿new￿technologies,￿which￿leads￿to￿increasing￿cost￿of￿R&D￿programs￿for￿new￿technologies,￿also
increases￿the￿risk￿that￿a￿new￿product￿or￿technology￿may￿not￿be￿successful

Furthermore,￿as￿the￿innovation￿cycle￿becomes￿more￿complex,￿developing￿new￿technology,￿including￿EUV￿technology,
requires￿increased￿R&D￿investments￿by￿our￿suppliers￿in￿order￿to￿meet￿the￿technology￿demands￿of￿us￿and￿our￿customers.
Our￿suppliers￿may￿not￿have,￿or￿may￿not￿be￿willing￿to￿invest,￿the￿resources￿necessary￿to￿continue￿the￿development￿of￿the
new￿technologies￿to￿the￿extent￿such￿investments￿are￿necessary,￿which￿may￿result￿in￿our￿contributing￿funds￿to￿such￿R&D
programs￿or￿limiting￿the￿R&D￿investments￿that￿we￿can￿undertake.

Failure to Adequately Protect the Intellectual Property Rights Upon Which We Depend Could Harm Our Business
We￿rely￿on￿intellectual￿property￿rights￿such￿as￿patents,￿copyrights￿and￿trade￿secrets￿to￿protect￿our￿proprietary
technology.￿However,￿we￿face￿the￿risk￿that￿such￿measures￿could￿prove￿to￿be￿inadequate￿because:

•

Intellectual￿property￿laws￿may￿not￿sufficiently￿support￿our￿proprietary￿rights￿or￿may￿change￿in￿the￿future￿in￿a￿manner
adverse￿to￿us;

• Patent￿rights￿may￿not￿be￿granted￿or￿interpreted￿as￿we￿expect;
• Patents￿will￿expire￿which￿may￿result￿in￿key￿technology￿becoming￿widely￿available￿that￿may￿hurt￿our￿competitive

position;

• The￿steps￿we￿take￿to￿prevent￿misappropriation￿or￿infringement￿of￿our￿proprietary￿rights￿may￿not￿be￿successful;￿and
• Third￿parties￿may￿be￿able￿to￿develop￿or￿obtain￿patents￿for￿similar￿competing￿technology.

In￿addition,￿litigation￿may￿be￿necessary￿to￿enforce￿our￿intellectual￿property￿rights,￿to￿determine￿the￿validity￿and￿scope￿of
the￿proprietary￿rights￿of￿others,￿or￿to￿defend￿against￿claims￿of￿infringement.￿Any￿such￿litigation￿may￿result￿in￿substantial
costs￿and￿diversion￿of￿management￿resources,￿and,￿if￿decided￿unfavorably￿to￿us,￿could￿have￿a￿material￿adverse￿effect
on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

ASML￿ANNUAL￿REPORT￿2014

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A Disruption in Our Information Technology Systems, Including Those Related to Cybersecurity, Could Adversely
Affect Our Business Operations
We￿rely￿on￿the￿accuracy,￿capacity￿and￿security￿of￿our￿information￿technology￿systems.￿Despite￿the￿measures￿that￿we
have￿implemented,￿including￿those￿related￿to￿cybersecurity,￿our￿systems￿could￿be￿breached￿or￿damaged￿by￿computer
viruses￿and￿systems￿attacks,￿natural￿or￿man-made￿incidents,￿disasters￿or￿unauthorized￿physical￿or￿electronic￿access.

From￿time￿to￿time￿we￿experience￿cybersecurity￿attacks￿on￿our￿information￿technology￿systems,￿which￿are￿becoming
more￿sophisticated￿and￿include￿malicious￿software,￿attempts￿to￿gain￿unauthorized￿access￿to￿data,￿and￿other￿electronic
security￿breaches￿that￿could￿lead￿to￿disruptions￿in￿critical￿systems,￿unauthorized￿release￿of￿confidential￿or￿otherwise
protected￿information￿(including￿confidential￿information￿relating￿to￿our￿customers￿and￿suppliers),￿and￿corruption
of￿data.￿Any￿system￿failure,￿accident￿or￿security￿breach￿could￿result￿in￿business￿disruption,￿theft￿of￿our￿intellectual
property,￿trade￿secrets￿(including￿our￿proprietary￿technology),￿customer￿or￿supplier￿information￿and￿unauthorized￿access
to￿personnel￿information.

Moreover,￿there￿can￿be￿no￿assurance￿that￿such￿measures￿we￿have￿implemented￿will￿be￿sufficient￿to￿prevent￿a￿system
failure,￿accident￿or￿security￿breach￿from￿occurring.￿To￿the￿extent￿that￿our￿business￿is￿interrupted￿or￿data￿or￿proprietary
technology￿is￿lost,￿destroyed￿or￿inappropriately￿used￿or￿disclosed,￿such￿disruptions￿could￿adversely￿affect￿our
competitive￿position,￿relationships￿with￿customers￿and￿suppliers￿or￿our￿business,￿financial￿condition￿and￿results￿of
operations.￿In￿addition,￿we￿may￿be￿required￿to￿incur￿significant￿costs￿to￿protect￿against￿or￿repair￿the￿damage￿caused￿by
these￿disruptions￿or￿security￿breaches￿in￿the￿future.

Defending Against Intellectual Property Claims Brought by Others Could Harm Our Business
In￿the￿course￿of￿our￿business,￿we￿are￿subject￿to￿claims￿by￿third￿parties￿alleging￿that￿our￿products￿or￿processes
infringe￿upon￿their￿intellectual￿property￿rights.￿If￿successful,￿such￿claims￿could￿limit￿or￿prohibit￿us￿from￿developing￿our
technology￿and￿manufacturing￿our￿products,￿which￿could￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial
condition￿and￿results￿of￿operations.

In￿addition,￿our￿customers￿may￿be￿subject￿to￿claims￿of￿infringement￿from￿third￿parties,￿alleging￿that￿our￿products￿used
by￿such￿customers￿in￿the￿manufacture￿of￿semiconductor￿products￿and/or￿the￿processes￿relating￿to￿the￿use￿of￿our
products￿infringe￿one￿or￿more￿patents￿issued￿to￿such￿third￿parties.￿If￿such￿claims￿were￿successful,￿we￿could￿be￿required
to￿indemnify￿customers￿for￿some￿or￿all￿of￿any￿losses￿incurred￿or￿damages￿assessed￿against￿them￿as￿a￿result￿of￿such
infringement,￿which￿could￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

We￿also￿may￿incur￿substantial￿licensing￿or￿settlement￿costs,￿which￿although￿potentially￿strengthening￿or￿expanding￿our
intellectual￿property￿rights￿or￿limiting￿our￿exposure￿to￿intellectual￿property￿claims￿of￿third￿parties,￿may￿have￿a￿material
adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

From￿late￿2001￿through￿2004,￿ASML￿was￿a￿party￿to￿a￿series￿of￿civil￿litigations￿and￿administrative￿proceedings￿in￿which
Nikon￿alleged￿ASML's￿infringement￿of￿Nikon￿patents￿relating￿to￿lithography.￿ASML￿in￿turn￿filed￿claims￿against￿Nikon.
Pursuant￿to￿agreements￿executed￿on￿December￿10,￿2004,￿ASML￿and￿Nikon￿agreed￿to￿settle￿all￿pending￿worldwide
patent￿litigation￿between￿the￿companies.￿The￿settlement￿included￿an￿exchange￿of￿releases,￿a￿patent￿cross-license
agreement￿related￿to￿lithography￿equipment￿used￿to￿manufacture￿semiconductor￿devices,￿and￿payments￿to￿Nikon￿by
ASML.

Under￿the￿terms￿of￿the￿Nikon￿Cross-License￿Agreement,￿beginning￿on￿January￿1,￿2015,￿the￿parties￿may￿bring￿suit￿for
infringement￿of￿certain￿patents￿subject￿to￿the￿agreement,￿including￿any￿infringement￿that￿occurred￿from￿January￿1,
2010￿through￿December￿31,￿2014￿(the￿"Cross-License￿Transition￿Period").￿Damages￿resulting￿from￿claims￿for￿patent
infringement￿occurring￿during￿the￿Cross-License￿Transition￿Period￿are￿limited￿to￿three￿percent￿of￿the￿net￿sales￿price￿of
applicable￿licensed￿products￿or￿optical￿components.

Accordingly,￿from￿January￿1,￿2015,￿both￿Nikon￿and￿we￿are￿no￿longer￿prohibited￿under￿the￿agreement￿from￿bringing
claims￿against￿each￿other￿on￿the￿basis￿of￿infringement￿of￿certain￿patents￿subject￿to￿the￿Nikon￿Cross-License￿Agreement.

If￿Nikon￿files￿suit￿against￿us￿alleging￿patent￿infringement,￿we￿may￿incur￿substantial￿legal￿fees￿and￿expenses,￿and￿we￿may
not￿prevail.￿Similarly,￿if￿we￿file￿suit￿against￿Nikon￿alleging￿patent￿infringement,￿we￿may￿incur￿substantial￿legal￿fees￿and
expenses,￿and￿we￿may￿not￿prevail.￿Patent￿litigation￿is￿complex￿and￿may￿extend￿for￿a￿protracted￿period￿of￿time,￿giving
rise￿to￿the￿potential￿for￿both￿substantial￿costs￿and￿diverting￿the￿attention￿of￿key￿management￿and￿technical￿personnel.
Potential￿adverse￿outcomes￿from￿patent￿litigation￿may￿include,￿without￿limitation,￿payment￿of￿significant￿monetary
damages,￿injunctive￿relief￿prohibiting￿the￿sale￿of￿products,￿and/or￿settlement￿involving￿significant￿costs￿to￿be￿paid￿by￿us,
any￿of￿which￿may￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and/or￿results￿of￿operations.￿We￿are
unable￿to￿predict￿at￿this￿time￿whether￿any￿such￿patent￿suit￿will￿in￿fact￿materialize,￿or,￿if￿so,￿what￿its￿outcome￿might￿be.

ASML￿ANNUAL￿REPORT￿2014

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We Are Subject to Risks in Our International Operations
The￿majority￿of￿our￿sales￿are￿made￿to￿customers￿outside￿Europe.￿There￿are￿a￿number￿of￿risks￿inherent￿in￿doing￿business
in￿some￿of￿those￿regions:
• Potentially￿adverse￿tax￿consequences;
• Unfavorable￿political￿or￿economic￿environments;
• Unexpected￿legal￿or￿regulatory￿changes;
• An￿inability￿to￿effectively￿protect￿intellectual￿property;￿and
• Adverse￿effects￿of￿foreign￿currency￿fluctuations.

If￿we￿are￿unable￿to￿manage￿successfully￿the￿risks￿inherent￿in￿our￿international￿activities,￿our￿business,￿financial￿condition
and￿results￿of￿operations￿could￿be￿materially￿and￿adversely￿affected.

In￿particular,￿19.2￿percent￿of￿our￿2014￿net￿sales￿and￿42.4￿percent￿of￿our￿2013￿net￿sales￿were￿derived￿from￿customers
in￿Taiwan.￿Taiwan￿has￿a￿unique￿international￿political￿status.￿The￿People's￿Republic￿of￿China￿asserts￿sovereignty￿over
Taiwan￿and￿does￿not￿recognize￿the￿legitimacy￿of￿the￿Taiwanese￿government.￿Changes￿in￿relations￿between￿Taiwan￿and
the￿People's￿Republic￿of￿China,￿Taiwanese￿government￿policies￿and￿other￿factors￿affecting￿Taiwan's￿political,￿economic
or￿social￿environment￿could￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.
In￿addition,￿certain￿of￿our￿manufacturing￿facilities￿as￿well￿as￿customers￿are￿located￿in￿South￿Korea.￿There￿are￿tensions
between￿the￿Republic￿of￿South￿Korea￿and￿the￿Democratic￿People’s￿Republic￿of￿Korea￿since￿the￿division￿of￿the￿Korean
Peninsula￿following￿World￿War￿II.￿The￿worsening￿of￿relations￿between￿those￿two￿countries￿or￿the￿outbreak￿of￿war￿on￿the
Korean￿Peninsula￿could￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿or￿results￿of￿operations.

In￿addition,￿the￿installation￿and￿servicing￿of￿our￿products￿requires￿us￿to￿travel￿to￿our￿customers'￿premises.￿Natural
disasters￿could￿affect￿our￿ability￿to￿do￿so.￿For￿example,￿the￿Japanese￿earthquake￿in￿2011￿resulted￿in￿the￿disruption￿of
our￿installation￿and￿servicing￿of￿systems￿for￿our￿customers￿in￿Japan.￿Natural￿disasters￿in￿areas￿where￿our￿customers
are￿located￿could￿prevent￿or￿disrupt￿the￿installation￿or￿servicing￿of￿our￿systems.￿In￿addition,￿we￿have￿customers￿located
in￿Israel.￿If￿the￿geopolitical￿environment￿prevents￿travel￿to￿Israel,￿it￿could￿result￿in￿the￿disruption￿of￿our￿installation￿and
servicing￿of￿systems￿for￿our￿customers.

Lastly,￿if￿there￿is￿a￿pandemic￿outbreak￿located￿near￿any￿of￿our￿customers,￿it￿could￿result￿in￿the￿disruption￿of￿our
installation￿and￿servicing￿of￿systems￿for￿our￿customers￿near￿the￿outbreak.￿Therefore,￿if￿there￿is￿a￿natural￿disaster,
geopolitical￿conflict￿or￿pandemic￿that￿prevents￿our￿ability￿to￿travel￿to￿our￿customers'￿premises,￿our￿business,￿financial
condition￿and￿results￿of￿operations￿may￿be￿materially￿adversely￿effected.

We Are Dependent on the Continued Operation of a Limited Number of Manufacturing Facilities
All￿of￿our￿manufacturing￿activities,￿including￿subassembly,￿final￿assembly￿and￿system￿testing,￿take￿place￿in￿cleanroom
facilities￿in￿Veldhoven,￿the￿Netherlands,￿in￿Wilton,￿Connecticut￿and￿in￿San￿Diego,￿California,￿both￿in￿the￿United￿States,
in￿Pyeongtaek,￿South-Korea￿and￿in￿Linkou,￿Taiwan.￿These￿facilities￿may￿be￿subject￿to￿disruption￿for￿a￿variety￿of￿reasons,
including￿work￿stoppages,￿fire,￿energy￿shortages,￿flooding￿or￿other￿natural￿disasters.￿We￿cannot￿ensure￿that￿alternative
production￿capacity￿would￿be￿available￿if￿a￿major￿disruption￿were￿to￿occur￿or￿that,￿if￿such￿capacity￿was￿available,￿it
could￿be￿obtained￿on￿favorable￿terms.￿Such￿a￿disruption￿could￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial
condition￿and￿results￿of￿operations.￿In￿addition,￿some￿of￿our￿key￿suppliers,￿including￿Zeiss,￿have￿a￿limited￿number￿of
manufacturing￿facilities,￿the￿disruption￿of￿which￿may￿significantly￿and￿adversely￿affect￿our￿production￿capacity.

Because of Labor Laws and Practices, Any Workforce Reductions That We May Seek to Implement in Order to
Reduce Costs Company-Wide May Be Delayed or Suspended
The￿semiconductor￿market￿is￿highly￿cyclical￿and￿as￿a￿consequence￿we￿may￿need￿to￿implement￿workforce￿reductions￿in
case￿of￿a￿downturn,￿in￿order￿to￿adapt￿to￿such￿market￿changes.￿In￿accordance￿with￿labor￿laws￿and￿practices￿applicable
in￿the￿jurisdictions￿in￿which￿we￿operate,￿a￿reduction￿of￿any￿significance￿may￿be￿subject￿to￿formal￿procedures￿that￿can
delay￿or￿may￿result￿in￿the￿modification￿of￿our￿planned￿workforce￿reductions.￿For￿example,￿ASML￿Netherlands￿B.V.,￿our
operating￿subsidiary￿in￿the￿Netherlands,￿has￿a￿Works￿Council,￿as￿required￿by￿Dutch￿law.￿If￿the￿Works￿Council￿renders
contrary￿advice￿in￿connection￿with￿a￿proposed￿workforce￿reduction￿in￿the￿Netherlands,￿but￿we￿nonetheless￿determine
to￿proceed,￿we￿must￿temporarily￿suspend￿any￿action￿while￿the￿Works￿Council￿determines￿whether￿to￿appeal￿to￿the
Enterprise￿Chamber￿of￿the￿Amsterdam￿Court￿of￿Appeal.￿This￿appeal￿process￿can￿cause￿a￿delay￿of￿several￿months￿and
may￿require￿us￿to￿address￿any￿procedural￿inadequacies￿identified￿by￿the￿Court￿in￿the￿way￿we￿reached￿our￿decision.￿Such
delays￿could￿impair￿our￿ability￿to￿reduce￿costs￿company-wide￿to￿levels￿comparable￿to￿those￿of￿our￿competitors.￿Also￿see
Item￿6.D￿"Employees".

Fluctuations in Foreign Exchange Rates Could Harm Our Results of Operations
We￿are￿exposed￿to￿currency￿risks.￿We￿are￿particularly￿exposed￿to￿fluctuations￿in￿the￿exchange￿rates￿between￿the￿U.S.
dollar,￿Japanese￿yen￿and￿the￿euro,￿as￿we￿incur￿manufacturing￿costs￿for￿our￿systems￿predominantly￿in￿euros￿while
portions￿of￿our￿net￿sales￿and￿cost￿of￿sales￿are￿denominated￿in￿U.S.￿dollars.

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In￿addition,￿a￿portion￿of￿our￿assets￿and￿liabilities￿and￿operating￿results￿are￿denominated￿in￿U.S.￿dollars,￿particularly
following￿our￿acquisition￿of￿Cymer￿in￿2013,￿and￿a￿small￿portion￿of￿our￿assets,￿liabilities￿and￿operating￿results￿are
denominated￿in￿currencies￿other￿than￿the￿euro￿and￿the￿U.S.￿dollar.￿Our￿Financial￿Statements￿are￿expressed￿in￿euros.
Accordingly,￿our￿results￿of￿operations￿and￿assets￿and￿liabilities￿are￿exposed￿to￿fluctuations￿in￿exchange￿rates￿between
the￿euro￿and￿such￿other￿currencies,￿and￿changes￿in￿currency￿exchange￿rates￿can￿result￿in￿losses￿in￿our￿Financial
Statements.￿In￿general,￿our￿customers￿generally￿run￿their￿businesses￿in￿U.S.￿dollars￿and￿therefore￿a￿weakening￿of￿the
U.S.￿dollar￿against￿the￿euro￿might￿impact￿the￿ability￿or￿desire￿of￿our￿customers￿to￿purchase￿our￿products.

Furthermore,￿a￿strengthening￿of￿the￿euro￿particularly￿against￿the￿Japanese￿yen￿could￿further￿intensify￿price-based
competition￿in￿those￿regions￿that￿account￿for￿the￿majority￿of￿our￿sales,￿resulting￿in￿lower￿prices￿and￿margins￿and￿a
material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

See￿Item￿5.A.￿"Operating￿Results￿-￿Foreign￿Exchange￿Management".

We May Be Unable to Make Desirable Acquisitions or to Integrate Successfully Any Businesses We Acquire 
Our￿future￿success￿may￿depend￿in￿part￿on￿the￿acquisition￿of￿businesses￿or￿technologies￿intended￿to￿complement,
enhance￿or￿expand￿our￿current￿business￿or￿products￿or￿that￿might￿otherwise￿offer￿us￿growth￿opportunities.￿Our￿ability
to￿complete￿such￿transactions￿may￿be￿hindered￿by￿a￿number￿of￿factors,￿including￿potential￿difficulties￿in￿obtaining
government￿approvals.

Any￿acquisition￿that￿we￿do￿make￿would￿pose￿risks￿related￿to￿the￿integration￿of￿the￿new￿business￿or￿technology￿with￿our
business.￿We￿cannot￿be￿certain￿that￿we￿will￿be￿able￿to￿achieve￿the￿benefits￿we￿expect￿from￿a￿particular￿acquisition￿or
investment.￿Acquisitions￿may￿also￿strain￿our￿managerial￿and￿operational￿resources,￿as￿the￿challenge￿of￿managing￿new
operations￿may￿divert￿our￿management￿from￿day-to-day￿operations￿of￿our￿existing￿business.￿Our￿business,￿financial
condition￿and￿results￿of￿operations￿may￿be￿materially￿and￿adversely￿affected￿if￿we￿fail￿to￿coordinate￿our￿resources
effectively￿to￿manage￿both￿our￿existing￿operations￿and￿any￿businesses￿we￿acquire.

In￿May￿2013,￿we￿acquired￿all￿of￿the￿outstanding￿shares￿of￿Cymer,￿a￿light￿source￿supplier￿with￿the￿goal￿of￿making￿EUV
technology￿more￿efficient,￿preventing￿additional￿delays￿in￿the￿introduction￿of￿EUV￿technology,￿and￿simplifying￿the￿supply
chain￿of￿EUV￿modules.￿If￿we￿fail￿to￿integrate￿Cymer￿successfully,￿this￿may￿result￿in￿a￿delay￿in￿the￿development￿of￿EUV.
Even￿if￿we￿are￿able￿to￿successfully￿integrate￿Cymer,￿there￿is￿no￿assurance￿that￿our￿acquisition￿of￿Cymer￿will￿result￿in
successful￿or￿timely￿development￿of￿our￿EUV￿technology.

In￿addition,￿in￿connection￿with￿acquisitions,￿anti-trust￿regulators￿may￿impose￿conditions￿on￿us,￿including￿requirements
to￿divest￿assets￿or￿other￿conditions￿that￿could￿make￿it￿difficult￿for￿us￿to￿integrate￿the￿businesses￿that￿we￿acquire.￿For
example,￿in￿connection￿with￿the￿Cymer￿acquisition￿we￿have￿agreed￿to￿maintain￿Cymer￿Light￿Sources￿as￿a￿stand-alone
business.

Our Business and Future Success Depend on Our Ability to Attract and Retain a Sufficient Number of Adequately
Educated and Skilled Employees
Our￿business￿and￿future￿success￿significantly￿depends￿upon￿our￿employees,￿including￿a￿large￿number￿of￿highly￿qualified
professionals,￿as￿well￿as￿our￿ability￿to￿attract￿and￿retain￿employees.￿Competition￿for￿such￿personnel￿is￿intense,￿and￿we
may￿not￿be￿able￿to￿continue￿to￿attract￿and￿retain￿such￿personnel.￿Our￿R&D￿programs￿require￿a￿significant￿number￿of
qualified￿employees.￿If￿we￿are￿unable￿to￿attract￿sufficient￿numbers￿of￿qualified￿employees,￿this￿could￿affect￿our￿ability￿to
conduct￿our￿research￿and￿development￿programs￿on￿a￿timely￿basis,￿which￿could￿adversely￿affect￿our￿business,￿financial
condition￿and￿results￿of￿operations.

In￿addition,￿if￿we￿lose￿a￿key￿employee￿to￿retirement,￿illness￿or￿otherwise,￿particularly￿a￿number￿of￿our￿highly￿qualified
professionals￿and/or￿senior￿management,￿we￿may￿not￿be￿able￿to￿timely￿find￿a￿suitable￿replacement.￿Moreover,￿as￿a
result￿of￿the￿uniqueness￿and￿complexity￿of￿our￿technology,￿qualified￿engineers￿capable￿of￿working￿on￿our￿systems￿are
scarce￿and￿generally￿not￿available￿(e.g.￿from￿other￿industries￿or￿companies).￿As￿a￿result,￿we￿must￿educate￿and￿train￿our
employees￿to￿work￿on￿our￿systems.￿Therefore,￿a￿loss￿of￿a￿number￿of￿key￿professionals￿and/or￿senior￿management￿can
be￿disruptive,￿costly￿and￿time￿consuming.

Furthermore,￿the￿increasing￿complexity￿of￿our￿products￿results￿in￿a￿longer￿learning-curve￿for￿new￿and￿existing
employees￿and￿suppliers￿leading￿to￿an￿inability￿to￿decrease￿cycle￿times￿and￿may￿result￿in￿the￿incurrence￿of￿significant
additional￿costs.

Our￿suppliers￿face￿similar￿risks￿in￿attracting￿qualified￿employees,￿including￿attracting￿employees￿in￿connection￿with￿R&D
programs￿that￿will￿support￿our￿R&D￿programs￿and￿technology￿developments.￿To￿the￿extent￿that￿our￿suppliers￿are￿unable
to￿attract￿qualified￿employees,￿this￿could￿adversely￿affect￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

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Hazardous Substances Are Used in the Production and Operation of Our Systems and Failure to Comply with
Applicable Regulations or Failure to Implement Appropriate Practices for Customer and Employee Environment,
Health and Safety could Subject us to Significant Liabilities
Hazardous￿substances￿are￿used￿in￿the￿production￿and￿operation￿of￿our￿lithography￿systems,￿which￿subjects￿us￿to
a￿variety￿of￿governmental￿regulations￿relating￿to￿environmental￿protection￿and￿employee￿and￿product￿health￿and
safety,￿including￿the￿transport,￿use,￿storage,￿discharge,￿handling,￿emission,￿generation,￿and￿disposal￿of￿toxic￿or￿other
hazardous￿substances.￿In￿addition,￿operating￿our￿machines￿(which￿use￿lasers￿and￿other￿potentially￿hazardous￿tools)￿is
dangerous￿and￿can￿result￿in￿injury.￿The￿failure￿to￿comply￿with￿current￿or￿future￿regulations￿could￿result￿in￿substantial
fines￿being￿imposed￿on￿us￿or￿other￿adverse￿consequences.￿Additionally,￿our￿products￿have￿become￿increasingly
complex.￿The￿increasing￿complexity￿requires￿us￿to￿invest￿in￿continued￿risk￿assessments￿and￿development￿of￿appropriate
preventative￿and￿protective￿measures￿for￿health￿and￿safety￿for￿both￿our￿employees￿(in￿connection￿with￿the￿production
and￿installation￿of￿our￿systems)￿and￿our￿customers'￿employees￿(in￿connection￿with￿the￿operation￿of￿our￿systems).
There￿can￿be￿no￿assurance￿that￿the￿health￿and￿safety￿practices￿we￿develop￿will￿be￿adequate￿to￿mitigate￿all￿health￿and
safety￿risks.￿Failing￿to￿comply￿with￿applicable￿regulations￿or￿the￿failure￿of￿our￿implemented￿practices￿for￿customer￿and
employee￿health￿and￿safety￿could￿subject￿us￿to￿significant￿liabilities,￿which￿could￿have￿a￿material￿adverse￿effect￿on￿our
business,￿financial￿condition￿and￿results￿of￿operations.

Risks￿Related￿to￿Our￿Ordinary￿Shares

We May Not Declare Cash Dividends at All or in Any Particular Amounts in Any Given Year
We￿aim￿to￿pay￿an￿annual￿dividend￿that￿will￿be￿stable￿or￿growing￿over￿time.￿Annually,￿the￿BoM￿will,￿upon￿prior￿approval
from￿the￿Supervisory￿Board,￿submit￿a￿proposal￿to￿the￿AGM￿with￿respect￿to￿the￿amount￿of￿dividend￿to￿be￿declared￿with
respect￿to￿the￿prior￿year.￿The￿dividend￿proposal￿in￿any￿given￿year￿will￿be￿subject￿to￿the￿availability￿of￿distributable￿profits
or￿retained￿earnings￿and￿may￿be￿affected￿by,￿among￿other￿factors,￿the￿BoM’s￿views￿on￿our￿potential￿future￿liquidity
requirements,￿including￿for￿investments￿in￿production￿capacity,￿the￿funding￿of￿our￿R&D￿programs￿and￿for￿acquisition
opportunities￿that￿may￿arise￿from￿time￿to￿time;￿and￿by￿future￿changes￿in￿applicable￿income￿tax￿and￿corporate￿laws.
Accordingly,￿the￿BoM￿may￿decide￿to￿propose￿not￿to￿pay￿a￿dividend￿or￿pay￿a￿lower￿dividend￿with￿respect￿to￿any￿particular
year￿in￿the￿future,￿which￿could￿have￿a￿negative￿effect￿on￿our￿share￿price.

Restrictions on Shareholder Rights May Dilute Voting Power
Our￿Articles￿of￿Association￿provide￿that￿we￿are￿subject￿to￿the￿provisions￿of￿Dutch￿law￿applicable￿to￿large￿corporations,
called￿"structuurregime".￿These￿provisions￿have￿the￿effect￿of￿concentrating￿control￿over￿certain￿corporate￿decisions￿and
transactions￿in￿the￿hands￿of￿our￿Supervisory￿Board.￿As￿a￿result,￿holders￿of￿ordinary￿shares￿may￿have￿more￿difficulty￿in
protecting￿their￿interests￿in￿the￿face￿of￿actions￿by￿members￿of￿our￿Supervisory￿Board￿than￿if￿we￿were￿incorporated￿in￿the
United￿States￿or￿another￿jurisdiction.

Our￿authorized￿share￿capital￿also￿includes￿a￿class￿of￿cumulative￿preference￿shares￿and￿we￿have￿granted￿"Stichting
Preferente￿Aandelen￿ASML",￿a￿Dutch￿foundation,￿an￿option￿to￿acquire,￿at￿their￿nominal￿value￿of￿EUR￿0.09￿per￿share,
such￿cumulative￿preference￿shares.￿Exercise￿of￿the￿preference￿share￿option￿would￿effectively￿dilute￿the￿voting￿power￿of
our￿outstanding￿ordinary￿shares￿by￿one-half,￿which￿may￿discourage￿or￿significantly￿impede￿a￿third￿party￿from￿acquiring￿a
majority￿of￿our￿voting￿shares.

See￿Item￿6.C.￿"Board￿Practices"￿and￿Item￿10.B.￿"Memorandum￿and￿Articles￿of￿Association".

Participating Customers in Our Customer Co-Investment Program Together Own a Significant Amount of Our
Ordinary Shares and Their Interests May Not Coincide with the Interests of Our Other Shareholders
In￿the￿CCIP,￿the￿Participating￿Customers,￿being￿Intel,￿Samsung￿and￿TSMC,￿through￿certain￿wholly-owned￿subsidiaries,
acquired￿in￿aggregate￿96,566,077￿ASML￿shares,￿constituting￿22.3%￿of￿ASML's￿issued￿and￿outstanding￿shares￿as￿of
December￿31,￿2014.￿In￿the￿CCIP,￿all￿of￿the￿Participating￿Customers￿agreed￿to￿a￿lock-up￿arrangement￿with￿us￿which
expire￿in￿the￿first￿half￿of￿2015.￿Once￿the￿contractual￿lock￿ups￿expire,￿the￿Participating￿Customers￿will￿be￿permitted￿to
sell￿their￿shares,￿subject￿to￿the￿following￿limitations:￿any￿market￿sales￿are￿limited￿in￿any￿6￿month￿period￿to￿a￿total￿of
4%,￿2.5%￿or￿1.5%￿of￿our￿disclosed￿outstanding￿shares,￿in￿the￿case￿of￿Intel,￿TSMC￿and￿Samsung,￿respectively,￿but
such￿limitations￿do￿not￿apply￿to￿underwritten￿sales￿or￿block￿trades.￿The￿sale￿of￿a￿large￿number￿of￿these￿shares,￿or￿the
perception￿that￿such￿sales￿may￿occur,￿could￿have￿an￿adverse￿effect￿on￿the￿trading￿price￿of￿our￿shares.

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Additionally,￿the￿interests￿of￿the￿Participating￿Customers￿may￿not￿always￿coincide￿with￿the￿interests￿of￿other￿holders
of￿our￿shares.￿The￿shares￿acquired￿by￿the￿Participating￿Customers￿are￿held￿by￿Dutch￿foundations￿which￿have￿issued
depositary￿receipts￿in￿respect￿thereof￿and￿the￿participating￿customers￿may￿only￿vote￿those￿shares￿in￿General￿Meetings
in￿exceptional￿circumstances,￿including￿the￿authorization￿of￿certain￿significant￿share￿issuances￿and￿share￿repurchases,
the￿approval￿of￿a￿significant￿change￿in￿the￿identity￿or￿nature￿of￿ASML￿or￿its￿business,￿any￿amendment￿to￿ASML's
Articles￿of￿Association￿that￿would￿materially￿affect￿the￿specific￿voting￿rights￿of￿the￿Participating￿Customers￿or￿that
would￿cause￿a￿significant￿change￿in￿the￿identity￿or￿nature￿of￿ASML￿or￿its￿business,￿the￿dissolution￿of￿ASML,￿and￿any
merger￿or￿demerger￿which￿would￿result￿in￿a￿material￿change￿in￿the￿identity￿or￿nature￿of￿ASML￿or￿its￿business.￿When
such￿exceptional￿circumstances￿occur,￿the￿Participating￿Customers,￿and￿in￿particular￿Intel￿(due￿to￿the￿percentage￿of￿our
shares￿that￿Intel￿owns),￿will￿be￿able￿to￿influence￿matters￿requiring￿approval￿by￿the￿General￿Meeting￿and￿may￿vote￿their
ordinary￿shares￿in￿a￿way￿with￿which￿other￿shareholders￿may￿not￿agree.

Item 4 Information on the Company

A. History and Development of the Company
We￿commenced￿business￿operations￿in￿1984.￿ASM￿Lithography￿Holding￿N.V.￿was￿incorporated￿in￿the￿Netherlands￿on
October￿3,￿1994￿to￿serve￿as￿the￿holding￿company￿for￿our￿worldwide￿operations,￿which￿include￿operating￿subsidiaries
in￿the￿Netherlands,￿the￿United￿States,￿Italy,￿France,￿Germany,￿the￿United￿Kingdom,￿Ireland,￿Belgium,￿Korea,￿Taiwan,
Singapore,￿China￿(including￿Hong￿Kong),￿Japan,￿Malaysia￿and￿Israel.￿In￿2001,￿we￿changed￿our￿name￿to￿ASML￿Holding
N.V.￿Our￿registered￿office￿is￿located￿at￿De￿Run￿6501,￿5504￿DR￿Veldhoven,￿the￿Netherlands,￿telephone￿number￿+31￿40
268￿3000.

From￿time￿to￿time,￿we￿pursue￿acquisitions￿of￿businesses￿that￿we￿believe￿will￿complement￿or￿enhance￿our￿core
lithography￿business:￿these￿have￿included￿the￿acquisitions￿of￿MaskTools￿(business￿unit￿of￿MicroUnity￿Systems
Engineering￿Inc.)￿in￿1999,￿Silicon￿Valley￿Group￿Inc.￿in￿2001,￿Brion￿Technologies￿Inc.￿in￿2007,￿Wijdeven￿Motion￿Holding
B.V.￿and￿Wijdeven￿Motion￿B.V.￿in￿2012￿and￿Cymer￿Inc.￿in￿2013.

Capital￿Expenditures￿and￿Divestures
Our￿capital￿expenditures￿(purchases￿of￿property,￿plant￿and￿equipment)￿for￿2014,￿2013￿and￿2012￿amounted￿to￿EUR￿358.3
million,￿EUR￿210.8￿million￿and￿EUR￿171.9￿million,￿respectively.￿The￿increase￿in￿capital￿expenditures￿mainly￿relate￿to￿the
construction￿of￿our￿EUV￿production￿facilities￿in￿Veldhoven,￿the￿Netherlands.￿Capital￿expenditures￿are￿primarily￿financed
through￿cash￿provided￿by￿operating￿activities.￿See￿item￿4.D.￿"Property,￿Plant￿and￿Equipment"￿for￿our￿expected￿capital
expenditures￿in￿2015.

B. Business Overview
ASML￿makes￿possible￿affordable￿microelectronics￿that￿improve￿the￿quality￿of￿life.￿ASML￿invents￿and￿develops￿complex
technology￿for￿high-tech￿lithography￿systems￿for￿the￿semiconductor￿industry.￿ASML's￿guiding￿principle￿is￿continuing
Moore's￿Law￿towards￿ever￿smaller,￿cheaper,￿more￿powerful￿and￿energy-efficient￿semiconductors.￿Our￿success￿is￿based
on￿three￿pillars:￿technology￿leadership￿combined￿with￿customer￿and￿supplier￿intimacy,￿highly￿efficient￿processes
and￿entrepreneurial￿people.￿We￿are￿a￿multinational￿company￿with￿over￿70￿locations￿in￿16￿countries,￿headquartered￿in
Veldhoven,￿the￿Netherlands.￿As￿of￿December￿31,￿2014,￿we￿employed￿11,318￿payroll￿employees￿(2013:￿10,360)￿and￿2,754
temporary￿employees￿(2013:￿2,865),￿measured￿in￿FTEs.￿ASML￿is￿traded￿on￿Euronext￿Amsterdam￿and￿NASDAQ￿under￿the
symbol￿ASML.

Our￿Business￿Model
For￿our￿business￿strategy,￿see￿Item￿5.￿"Operating￿and￿Financial￿Review￿and￿Prospects￿-￿Executive￿Summary￿-￿Business
Strategy".

Our￿business￿model￿is￿derived￿from￿our￿"value￿of￿ownership"￿concept￿which￿is￿based￿on￿the￿following￿principles:
• Offering￿ongoing￿improvements￿of￿throughput,￿imaging￿and￿overlay￿by￿introducing￿advanced￿technology￿based
modular￿platforms,￿advanced￿applications￿and￿Holistic￿Lithography￿solutions￿outside￿the￿traditional￿lithography
business,￿each￿resulting￿in￿lower￿costs￿or￿higher￿value￿per￿product￿for￿our￿customers;

• Providing￿customer￿services￿that￿ensure￿efficient￿installation￿and￿maintenance,￿superior￿support￿and￿training￿to

optimize￿manufacturing￿processes￿of￿our￿customers;

• Enhancing￿the￿capabilities￿of￿the￿installed￿base￿of￿our￿customers￿through￿ongoing￿field￿upgrades￿on￿throughput,

imaging￿and￿overlay,￿based￿on￿further￿technology￿developments;

• Reducing￿the￿cycle￿time￿between￿a￿customer’s￿order￿of￿a￿system￿and￿the￿use￿of￿that￿system￿in￿volume￿production;

and

• Providing￿refurbishing￿services￿that￿effectively￿increase￿residual￿value￿by￿extending￿the￿life￿of￿equipment.

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To￿be￿able￿to￿execute￿our￿business￿model￿we￿seek￿to:
• Maintain￿appropriate￿levels￿of￿R&D￿to￿offer￿the￿most￿advanced￿technology￿suitable￿for￿enhancing/following￿Moore's

Law,￿as￿well￿as￿achieving￿high-throughput￿and￿low-cost￿volume￿production￿at￿the￿earliest￿possible￿date;

• Be￿able￿to￿attract,￿train,￿retain￿and￿motivate￿highly￿qualified,￿skilled￿and￿educated￿employees;
•
• Expand￿operational￿flexibility￿in￿R&D￿and￿manufacturing￿by￿reinforcing￿strategic￿alliances￿with￿world￿class￿partners,

Improve￿the￿availability￿of￿our￿installed￿system￿base;￿and

including￿outsourcing￿companies.

Market￿and￿Technology￿Overview
The￿chip-making￿business￿is￿focused￿on￿"shrink",￿or￿reducing￿the￿size￿of￿chip￿designs,￿as￿a￿driver￿of￿cost￿reduction￿and
increased￿functionality.￿The￿worldwide￿electronics￿and￿computer￿industries￿have￿experienced￿significant￿growth￿since
the￿commercialization￿of￿ICs￿in￿the￿1960s,￿largely￿due￿to￿the￿continuous￿reduction￿of￿cost￿per￿function￿performed￿by￿ICs.
Improvement￿in￿the￿design￿and￿manufacture￿of￿ICs￿with￿higher￿circuit￿or￿"packing"￿densities￿has￿resulted￿in￿smaller￿and
lower￿cost￿ICs,￿capable￿of￿performing￿a￿larger￿number￿of￿functions￿at￿higher￿throughput￿levels￿and￿with￿reduced￿power
consumption.￿We￿believe￿that￿these￿long-term￿trends￿will￿continue￿for￿the￿foreseeable￿future￿and￿will￿be￿accompanied
by￿a￿continuing￿demand,￿subject￿to￿ongoing￿cyclical￿variation￿and￿semiconductor￿industry￿volatility,￿for￿production
equipment￿that￿can￿accurately￿produce￿advanced￿ICs￿in￿high￿volumes￿at￿the￿lowest￿possible￿cost.

See￿item￿4.B.￿"Business￿Overview￿-￿Product￿Development￿and￿Products".

Most￿of￿our￿systems￿use￿a￿mask￿to￿achieve￿the￿required￿chip￿pattern.￿A￿mask￿is￿a￿flat,￿transparent￿quartz￿plate
containing￿an￿opaque￿microscopic￿pattern:￿an￿image￿of￿the￿electronic￿circuitry￿for￿one￿layer￿of￿a￿chip.￿The￿mask￿is
placed￿in￿a￿scanner￿where￿intense￿light￿passing￿through￿it￿projects￿the￿pattern,￿via￿a￿series￿of￿reducing￿lenses,￿onto
part￿of￿the￿wafer.￿Before￿exposure,￿the￿wafer￿is￿coated￿with￿photo￿resist￿and￿positioned￿so￿that￿the￿projected￿pattern
aligns￿with￿existing￿features￿on￿the￿wafer.￿After￿exposure￿and￿developing,￿the￿pattern￿left￿on￿the￿wafer￿surface￿is￿used￿to
selectively￿process￿and￿build￿up￿the￿next￿layer.

See￿Item￿4.B.￿"Business￿Overview￿-￿Product￿Development￿and￿Products".

Customers
The￿four￿major￿customer￿sectors￿to￿which￿we￿sell￿our￿products￿are￿Integrated￿Device￿Manufacturers￿("IDM")￿and
Foundries￿(together￿"Logic"),￿NAND-Flash￿memory￿and￿DRAM￿memory￿chipmakers￿(together￿"Memory").

Supported￿by￿their￿technology￿roadmaps,￿IC￿Logic￿manufacturers￿continue￿to￿show￿interest￿in￿shrinking￿resolution￿as
a￿means￿to￿lower￿manufacturing￿costs￿per￿unit￿or￿adding￿value￿through￿more￿functional￿integration.￿We￿believe￿that￿the
leading￿IC￿manufacturers￿have￿plans￿to￿migrate￿their￿production￿capabilities￿in￿the￿foreseeable￿future￿to￿imaging￿at￿a
resolution￿beyond￿the￿7￿nm￿node￿requirements,￿for￿which￿they￿will￿require￿state-of-the-art￿lithography￿equipment.

Product￿Development￿and￿Products
General
We￿develop￿Lithography￿systems￿and￿related￿products￿for￿the￿semiconductor￿industry.￿Lithography￿systems￿are￿used
to￿print￿complex￿circuit￿patterns￿onto￿wafers.￿Wafers￿are￿the￿primary￿raw￿material￿for￿ICs￿and￿this￿printing￿is￿one￿of￿the
most￿critical￿and￿expensive￿steps￿in￿wafer￿fabrication.￿Lithography￿systems￿are￿therefore￿a￿significant￿focus￿of￿the￿IC
industry’s￿demand￿for￿cost-efficient￿enhancements￿to￿production￿technology.￿Our￿product￿development￿strategy￿focuses
on￿the￿development￿of￿product￿families￿based￿on￿a￿modular￿and￿upgradeable￿design.

Systems
Our￿older￿PAS￿2500￿and￿PAS￿5000￿lithography￿systems,￿which￿we￿no￿longer￿manufacture￿but￿continue￿to￿refurbish,
are￿used￿with￿g-line￿and￿i-line￿light￿sources￿for￿processing￿wafers￿up￿to￿150￿mm￿in￿diameter,￿and￿are￿employed￿in
manufacturing￿environments￿and￿in￿special￿applications￿for￿which￿design￿resolutions￿of￿0.5￿microns￿and￿above￿are
required.

Our￿PAS￿5500￿product￿family￿comprises￿advanced￿wafer￿steppers￿and￿Step￿&￿Scan￿systems￿equipped￿with￿i-line,￿KrF
and￿ArF￿light￿sources￿for￿processing￿wafers￿up￿to￿200￿mm￿in￿diameter,￿and￿are￿employed￿in￿volume￿manufacturing￿to
achieve￿design￿nodes￿requiring￿imaging￿at￿a￿resolution￿down￿to￿90￿nm.

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In￿2000￿we￿introduced￿the￿TWINSCAN￿platform,￿which￿is￿the￿basis￿for￿our￿current￿and￿next-generation￿systems,￿which
are￿expected￿to￿be￿capable￿of￿extending￿shrink￿technology￿down￿to￿38￿nm￿and￿beyond￿with￿MPT￿techniques.￿We￿offer
TWINSCAN￿systems,￿equipped￿with￿i-line,￿KrF￿and￿ArF￿light￿sources￿for￿processing￿wafers￿up￿to￿300￿mm￿in￿diameter￿for
manufacturing￿environments￿for￿which￿imaging￿at￿a￿resolution￿down￿to￿38￿nm￿are￿required.￿The￿modular￿upgradeable
design￿philosophy￿of￿the￿PAS￿5500￿product￿family￿has￿been￿further￿refined￿and￿applied￿in￿the￿design￿TWINSCAN.

TWINSCAN￿systems￿also￿include￿immersion￿litography￿systems￿(TWINSCAN￿immersion￿systems).￿With￿a￿TWINSCAN
immersion￿system,￿wafer￿measurement,￿including￿focus￿and￿alignment,￿is￿completed￿in￿the￿"dry"￿stage,￿while￿imaging
process,￿using￿water￿applied￿between￿the￿wafer￿and￿the￿lens,￿is￿completed￿in￿the￿"wet"￿stage.￿This￿immersion
technology￿places￿a￿fluid￿between￿the￿wafer￿and￿a￿system’s￿projection￿lens￿to￿enhance￿focus￿and￿enable￿circuit￿line-
width￿to￿shrink￿to￿smaller￿dimensions￿than￿what￿is￿possible￿with￿"dry"￿lithography￿systems.￿ASML￿pioneered￿this￿"wet"
technology￿and￿has￿experienced￿strong￿demand￿for￿immersion-based￿systems;￿this￿technology￿has￿been￿adopted￿by
all￿of￿our￿leading￿customers.￿We￿are￿one￿of￿the￿world’s￿leaders￿(measured￿in￿revenues)￿in￿immersion￿technology￿and￿we
were￿the￿world’s￿first￿producer￿of￿dual-stage￿design￿TWINSCAN￿systems.

We￿have￿developed￿different￿immersion￿systems￿for￿different￿customer￿needs.￿The￿TWINSCAN￿NXT￿platform￿enables
next￿generations￿of￿semiconductors￿through￿the￿so-called￿MPT￿which￿requires￿two￿or￿more￿exposures￿per￿layer￿on￿a
chip,￿enabling￿precise￿imaging￿patterns￿and￿lines￿by￿using￿our￿TWINSCAN￿NXT￿planar￿wafer￿stage￿and￿breakthrough
grid￿metrology.￿During￿2014,￿our￿TWINSCAN￿immersion￿systems￿set￿new￿productivity￿records:￿two￿systems￿each￿imaged
more￿than￿1.5￿million￿wafers￿in￿a￿12-month￿period.

In￿2014,￿we￿successfully￿ramped￿our￿newest￿immersion￿system,￿the￿NXT:1970Ci￿and￿shipped￿51￿systems,￿which￿offer
overlay￿below￿2￿nm,￿focus￿control￿of￿less￿than￿20￿nm￿and￿throughput￿of￿more￿than￿250￿wafers￿per￿hour.￿Approximately
260￿NXT:1950i￿and￿NXT:1960Bi￿systems￿are￿currently￿in￿use￿by￿our￿customers,￿which￿are￿field-upgradeable￿to￿the￿same
performance￿level￿as￿our￿NXT:1970Ci￿system.

In￿2010,￿we￿achieved￿a￿major￿milestone￿with￿EUV￿lithography￿when￿we￿shipped￿our￿first￿NXE:3100￿system.￿These
systems￿are￿equipped￿with￿EUV￿light￿source￿technology,￿based￿upon￿a￿tin￿plasma,￿producing￿light￿at￿a￿wavelength
of￿13.5￿nm￿and￿provide￿imaging￿at￿a￿resolution￿of￿27￿nm.￿The￿NXE￿system￿has￿an￿innovative￿optical￿technology,
utilizing￿reflective￿mirrors￿rather￿than￿the￿traditional￿refractive￿optics,￿with￿a￿NA￿of￿0.25.￿The￿light￿in￿NXE￿operates￿in
a￿vacuum￿environment,￿through￿the￿entire￿optical￿train,￿to￿wafer￿level.￿With￿the￿combination￿of￿these￿revolutionary
technologies,￿EUV￿offers￿the￿potential￿to￿provide￿our￿customers￿a￿roadmap￿for￿future￿shrink,￿and￿we￿expect￿it￿to￿become
the￿predominant￿lithography￿technology￿for￿the￿coming￿years.￿NXE￿systems￿are￿targeted￿for￿production￿of￿ICs￿down￿to
minimum￿features￿of￿13￿nm￿with￿single￿patterning,￿addressing￿current￿Memory￿roadmaps￿and￿logic￿processes￿down￿to
the￿7￿nm￿node￿with￿extension￿beyond￿this￿possible,￿using￿MPT.

The￿success￿of￿EUV￿is￿dependent￿on,￿and￿subject￿to,￿the￿successful￿implementation￿of,￿among￿other￿things,￿technology
related￿to￿the￿light￿source,￿source￿power,￿system￿availability,￿scanner￿performance￿and￿other￿technologies￿specific￿to
EUV,￿by￿us￿and￿our￿suppliers.￿We￿acquired￿Cymer￿on￿May￿30,￿2013,￿with￿the￿goal￿of￿achieving￿our￿strategic￿objective
of￿delivering￿an￿economically￿viable￿EUV￿scanner￿to￿semiconductor￿manufacturers￿as￿soon￿as￿reasonably￿possible.
We￿believe￿that￿combining￿Cymer’s￿expertise￿in￿EUV￿light￿sources￿with￿our￿expertise￿in￿lithography￿systems￿design
and￿integration￿will￿reduce￿the￿risks￿related￿to￿the￿successful￿development,￿and￿accelerate￿the￿introduction￿of,￿EUV
technology.

In￿2013,￿we￿shipped￿our￿first￿NXE:3300B￿systems.￿The￿NXE:3300B￿system￿is￿the￿successor￿of￿the￿NXE:3100￿system￿and
is￿our￿third-generation￿EUV-system.￿A￿NXE:3300B￿system￿combines￿a￿wavelength￿of￿13.5￿nm￿and￿an￿optical￿system￿with
a￿NA￿of￿0.33￿to￿provide￿imaging￿at￿a￿resolution￿of￿22￿nm.￿Compared￿to￿the￿NXE:3100￿system,￿the￿NXE:3300B￿system
has￿among￿other￿things￿a￿better￿NA￿as￿well￿as￿an￿improved￿light￿source.￿These￿enhancements￿of￿the￿NXE:3300B￿enable
the￿improved￿performance,￿in￿the￿same￿manner￿that￿upgrades￿to￿the￿NXT￿platform￿improve￿throughput.

Our￿EUV￿program￿showed￿substantial￿progress￿in￿2014.￿All￿installed￿NXE:3300B￿systems￿have￿been￿upgraded￿to￿a￿wafer
processing￿capability￿of￿more￿than￿500￿wafers￿per￿day.￿As￿of￿December￿31,￿2014,￿a￿total￿of￿7￿NXE:3300B￿EUV￿systems
were￿in￿the￿field.￿We￿achieved￿the￿500-wafer-per-day￿target￿that￿our￿customers￿have￿set￿for￿end￿2014￿and￿demonstrated
stable￿source￿operation￿at￿80￿Watts￿running￿continuously￿for￿24￿hours￿at￿a￿customer￿site.￿We￿remain￿on￿target￿to￿deliver
systems￿with￿a￿productivity￿of￿1500￿wafers￿per￿day￿in￿2016.

TSMC￿ordered￿two￿NXE:3350B￿EUV￿systems￿for￿delivery￿in￿2015￿with￿the￿intention￿to￿use￿those￿systems￿in￿production.
In￿addition,￿two￿NXE:3300B￿systems￿already￿delivered￿to￿TSMC￿will￿be￿upgraded￿to￿NXE:3350B￿performance.

ASML￿ANNUAL￿REPORT￿2014

16

ASML￿Lithography￿System￿Product￿Portfolio:

System
PAS 5500 SYSTEMS1
PAS￿5500/450
PAS￿5500/750
PAS￿5500/850
PAS￿5500/1150

TWINSCAN DUV SYSTEMS2
TWINSCAN￿XT:400
TWINSCAN￿XT:450
TWINSCAN￿XT:800
TWINSCAN￿XT:860
TWINSCAN￿XT:1000
TWINSCAN￿XT:1450
TWINSCAN￿XT:1700￿immersion
TWINSCAN￿XT:19X0￿immersion
TWINSCAN￿NXT:19X0￿immersion

TWINSCAN EUV SYSTEMS
NXE:3100
NXE:3300
NXE:3350
NXE:3400

Resolution

Wavelength

Light source

Numerical aperture

220￿nm
130￿nm
110￿nm
90￿nm

350￿nm
220￿nm
120￿nm
110￿nm
80￿nm
65￿nm
45￿nm
38￿nm
38￿nm

27￿nm
22￿nm
16￿nm
13￿nm

365￿nm
248￿nm
248￿nm
193￿nm

365￿nm
365￿nm
248￿nm
248￿nm
248￿nm
193￿nm
193￿nm
193￿nm
193￿nm

13.5￿nm
13.5￿nm
13.5￿nm
13.5￿nm

i-line
KrF
KrF
ArF

i-line
i-line
KrF
KrF
KrF
ArF
ArF
ArF
ArF

EUV
EUV
EUV
EUV

0.48-0.65
0.50-0.70
0.55-0.80
0.50-0.75

0.48-0.65
0.48-0.65
0.55-0.80
0.55-0.80
0.50-0.93
0.65-0.93
0.75-1.20
0.85-1.35
0.85-1.35

0.25
0.33
0.33
0.33

1

2

This￿table￿does￿not￿include￿older￿(including￿used)￿products￿sold￿on￿the￿PAS￿2500,￿PAS￿5000￿and￿PAS￿5500￿systems￿or￿system￿enhancements￿on
steppers￿and￿scanners￿and￿other￿products￿(e.g.￿YieldStar￿or￿computational￿lithography￿products).
The￿X￿in￿the￿product￿number￿represents￿different￿models￿in￿the￿product￿portfolio￿within￿the￿same￿resolution.￿For￿example,￿NXT:19X0￿can￿either
represent￿NXT:1950,￿NXT:1960￿or￿NXT:1970.

System related products
We￿continuously￿develop￿and￿sell￿a￿range￿of￿product￿options￿and￿enhancements￿designed￿to￿increase￿throughput￿and
improve￿imaging￿and￿overlay￿to￿optimize￿value￿of￿ownership￿over￿the￿entire￿life￿of￿our￿systems.

Our￿customers￿optimize￿their￿scanner￿performance￿by￿taking￿into￿account￿the￿entire￿chip￿creation￿process,￿from￿design
to￿volume￿manufacturing,￿we￿call￿this￿approach￿Holistic￿Lithography.￿We￿complement￿our￿scanner￿products￿with￿a
rapidly￿expanding￿Holistic￿Lithography￿portfolio￿of￿software￿and￿metrology￿products￿to￿help￿our￿customers￿optimize
semiconductor￿scanner￿performance,￿provide￿a￿faster￿start￿to￿chip￿production￿and￿achieve￿better￿imaging￿at￿higher
resolutions.￿Semiconductor￿manufacturers￿face￿increasingly￿smaller￿margins￿of￿error￿as￿they￿shrink￿chip￿features.
Holistic￿Lithography￿provides￿a￿way￿to￿shrink￿within￿these￿margins,￿offering￿additional￿significant￿revenue-generating
and￿cost-saving￿opportunities￿to￿our￿customers.

Our￿computational￿lithography￿products￿capture￿detailed￿knowledge￿of￿scanner￿design￿and￿real￿performance,￿which
enables￿our￿systems￿to￿accurately￿predict￿real-life￿manufacturing￿performance.￿These￿predictions￿are￿essential￿in
addressing￿possible￿ramp-up￿and￿yield￿problems￿in￿advance,￿potentially￿avoiding￿months￿of￿delay￿in￿time-to-market￿for
our￿customers.￿The￿same￿prediction￿capabilities￿allow￿our￿scanners￿to￿be￿optimally￿calibrated￿for￿improved￿performance
in￿production,￿given￿specific￿chip￿designs￿or￿masks,￿thereby￿achieving￿improved￿yield.￿Our￿current￿computational
lithography￿portfolio￿comprises￿both￿traditional￿products￿(such￿as￿RET/OPC/DPT/SMO),￿as￿well￿as￿solutions￿that￿directly
interface￿with￿the￿numerous￿calibration￿controls￿in￿our￿scanner￿to￿optimize￿performance.￿

To￿provide￿a￿total￿solution￿for￿scanner￿control￿we￿offer￿our￿own￿advanced￿wafer￿metrology￿system￿("YieldStar").
This￿wafer￿metrology￿system￿leverages￿the￿scanner￿controls￿to￿compensate￿for￿potential￿performance￿drifts￿in￿the
scanner￿itself,￿as￿well￿as￿in￿other￿steps￿of￿the￿device￿manufacturing￿process,￿such￿as￿mask￿deterioration,￿resist￿coating
fingerprints,￿etching￿fingerprints,￿or￿chemical-mechanical￿polishing￿fingerprints.￿YieldStar￿uses￿scatterometry￿technology
for￿overlay￿and￿CD￿measurements.￿YieldStar￿scatterometry￿provides￿high￿overlay￿and￿low￿cost￿wafer￿metrology￿data￿that
can￿be￿used￿for￿further￿improving￿the￿performance￿of￿our￿systems.

In￿2012,￿ASML￿began￿shipment￿of￿the￿third￿generation￿YieldStar￿metrology￿system,￿the￿S200C,￿which￿featured￿higher
throughput￿and￿measurement￿overlay￿to￿support￿tighter￿on￿product￿wafer￿overlay￿and￿focus￿control￿performance￿of￿the
NXT:19X0￿systems.￿In￿2014,￿we￿introduced￿the￿fourth￿generation￿YieldStar￿Metrology￿system,￿the￿T250D,￿available￿in
both￿stand-alone￿and￿integrated￿version.￿The￿YieldStar￿250D￿contains￿a￿source￿with￿wavelengths￿up￿to￿765nm￿and￿has
sensor￿improvements￿whereas￿the￿YieldStar￿200￿series￿enable￿more￿precise￿overlay￿measurement￿of￿thicker￿stacks￿with
increased￿sampling￿as￿well￿as￿in-line￿focus￿and￿CD.￿The￿ramp￿in￿shipments￿of￿our￿YieldStar￿metrology￿tool￿continued,
with￿a￿total￿of￿199￿systems￿shipped￿to￿all￿major￿customers￿since￿introduction.

ASML￿ANNUAL￿REPORT￿2014

17

Furthermore,￿as￿a￿consequence￿of￿the￿acquisition￿of￿Cymer,￿we￿offer￿our￿customers￿OnPulse￿contracts￿by￿providing
on-site￿support￿from￿certified￿service￿engineers￿and￿continuous￿real-time￿light￿source￿monitoring.￿These￿contracts￿to
enhance￿light￿source￿productivity,￿offer￿our￿customers￿predictable￿light￿source￿running￿costs￿that￿scale￿directly￿with
pulse￿utilization.

Sales￿and￿Customer￿Support
We￿support￿our￿customers￿with￿a￿broad￿range￿of￿applications,￿services,￿and￿technical￿support￿products￿to￿maintain￿and
maximize￿the￿performance￿of￿our￿systems￿at￿customer￿sites.￿We￿also￿offer￿refurbished￿systems￿and￿system￿upgrades.

We￿market￿and￿sell￿our￿products￿through￿our￿direct￿sales￿force.

Our￿account￿managers,￿field￿engineers￿and￿applications,￿service￿and￿technical￿support￿specialists￿are￿located
throughout￿Asia,￿the￿United￿States￿and￿Europe.￿We￿have￿established￿ACE￿in￿Taiwan,￿Asia.￿The￿primary￿goal￿of￿ACE￿is￿to
serve￿as￿a￿supplementary￿engine￿to￿propel￿ASML’s￿long-term￿growth,￿by￿means￿of:
• Featuring￿customer￿support￿and￿training,￿logistics,￿refurbishment,￿technology￿and￿application￿development￿and￿also

producing￿all￿YieldStar￿systems;

• Enabling￿sourcing￿of￿equipment￿modules,￿components￿and￿services￿in￿the￿region;
• Perform￿as￿a￿training￿center￿to￿develop￿worldwide￿talent￿for￿our￿workforce￿and￿customers.

Revenue￿per￿Geographic￿Market￿
In￿2014,￿we￿derived￿64.3￿percent￿of￿net￿sales￿from￿Asia,￿32.3￿percent￿from￿the￿United￿States￿and￿3.4￿percent￿from
Europe￿(2013:￿Asia:￿82.5￿percent;￿United￿States:￿13.7￿percent￿and￿Europe:￿3.8￿percent;￿2012:￿Asia:￿70.7￿percent;￿United
States:￿23.9￿percent￿and￿Europe:￿5.4￿percent).￿See￿Note￿21￿to￿our￿Financial￿Statements.

Manufacturing,￿Logistics￿and￿Suppliers￿
The￿execution￿of￿our￿business￿model￿is￿supported￿by￿outsourcing￿production￿of￿a￿significant￿part￿of￿components￿and
modules￿that￿comprise￿our￿lithography￿systems,￿working￿in￿partnership￿with￿suppliers￿from￿all￿over￿the￿world.￿Our
manufacturing￿activities￿comprise￿subassembly￿and￿testing￿of￿certain￿modules￿and￿the￿final￿assembly￿and￿fine￿tuning/
testing￿of￿a￿complete￿system￿from￿components￿and￿modules￿that￿are￿manufactured￿to￿our￿specifications￿by￿third￿parties
and￿by￿us.￿All￿of￿our￿manufacturing￿activities￿are￿performed￿in￿cleanroom￿facilities￿in￿Veldhoven,￿the￿Netherlands,￿in
Wilton,￿Connecticut￿and￿in￿San￿Diego,￿California,￿both￿the￿United￿States,￿in￿Pyeongtaek,￿South￿Korea￿and￿in￿Linkou,
Taiwan.￿We￿procure￿system￿components￿and￿subassemblies￿from￿a￿single￿supplier￿or￿a￿limited￿group￿of￿suppliers
in￿order￿to￿ensure￿overall￿quality￿and￿on-time￿delivery.￿We￿jointly￿operate￿a￿strategy￿with￿suppliers￿known￿as￿"value
sourcing",￿which￿is￿based￿on￿competitive￿performance.￿The￿essence￿of￿value￿sourcing￿is￿to￿maintain￿a￿supply￿base￿that
is￿world￿class￿and￿globally￿competitive￿and￿present.

Value￿sourcing￿is￿intended￿to￿align￿the￿performance￿of￿our￿suppliers￿with￿our￿requirements￿on￿quality,￿logistics,
technology￿and￿total￿costs.

Our￿value￿sourcing￿strategy￿is￿based￿on￿the￿following￿strategic￿principles:
•￿￿￿￿￿￿Maintaining￿long-term￿relationships￿with￿our￿suppliers;
•￿￿￿￿￿￿Sharing￿risks￿and￿rewards￿with￿our￿suppliers;
•￿￿￿￿￿￿Dual￿sourcing￿of￿knowledge,￿globally,￿together￿with￿our￿suppliers;￿and
•￿￿￿￿￿￿Single￿sourcing￿of￿products,￿where￿possible￿or￿required.

Zeiss￿is￿our￿single￿supplier￿of￿lenses,￿mirrors,￿collectors￿and￿other￿optical￿components.￿In￿2014,￿27.4￿percent￿of￿our
aggregate￿cost￿of￿sales￿were￿purchased￿from￿Zeiss￿(2013:￿27.4￿percent;￿2012:￿28.0￿percent).

Zeiss￿is￿highly￿dependent￿on￿its￿manufacturing￿and￿testing￿facilities￿in￿Oberkochen￿and￿Wetzlar,￿Germany,￿and￿its
suppliers.￿Moreover,￿Zeiss￿has￿a￿finite￿capacity￿for￿production￿of￿lenses￿and￿optical￿components￿included￿in￿our￿systems
and￿of￿collectors￿included￿in￿our￿EUV￿sources.￿The￿expansion￿of￿this￿production￿capacity￿may￿increase￿their￿lead-time.
From￿time￿to￿time,￿the￿number￿of￿systems￿we￿are￿able￿to￿produce￿may￿be￿limited￿by￿the￿capacity￿of￿Zeiss.￿In￿2014￿our
production￿was￿not￿limited￿by￿the￿deliveries￿from￿Zeiss.

Our￿relationship￿with￿Zeiss￿is￿structured￿as￿a￿strategic￿alliance￿pursuant￿to￿several￿agreements￿executed￿in￿1997￿and
subsequent￿years.￿These￿agreements￿define￿a￿framework￿in￿all￿areas￿of￿our￿business￿relationship.￿The￿partnership
between￿ASML￿and￿Zeiss￿is￿focused￿on￿continuous￿improvement￿of￿operational￿excellence.

Pursuant￿to￿these￿agreements,￿ASML￿and￿Zeiss￿have￿agreed￿to￿continue￿their￿strategic￿alliance￿until￿either￿party
provides￿at￿least￿three￿years￿notice￿of￿its￿intent￿to￿terminate.

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In￿addition￿to￿Zeiss,￿we￿also￿rely￿on￿other￿outside￿vendors￿for￿the￿components￿and￿subassemblies￿used￿in￿our￿systems
and￿sources,￿each￿of￿which￿is￿obtained￿from￿a￿limited￿number￿of￿suppliers￿many￿of￿whom￿have￿almost￿exclusive
competences￿in￿their￿respective￿industries.

See￿Item￿3.D.￿"Risk￿Factors￿-￿The￿Number￿of￿Systems￿We￿Can￿Produce￿is￿Limited￿by￿Our￿Dependence￿on￿a￿Limited
Number￿of￿Suppliers￿of￿Key￿Components".

We￿have￿a￿flexible￿labor￿model￿with￿a￿mix￿of￿fixed￿and￿flexible￿contracted￿labor￿throughout￿all￿departments￿and￿facilities
in￿Veldhoven,￿the￿Netherlands.￿Our￿fixed￿contracted￿labor￿are￿compensated￿under￿a￿partly￿variable￿salary￿structure
through￿ASML’s￿profit￿sharing￿plan.￿In￿facilities￿outside￿the￿Netherlands,￿the￿applicable￿local￿labor￿laws￿and￿regulations
provide￿sufficient￿flexibility.￿This￿reinforces￿our￿ability￿to￿adapt￿more￿quickly￿to￿the￿semiconductor￿market￿cycles,
including￿support￿for￿potential￿24-hour,￿seven￿days-a-week￿production￿activities.￿By￿maximizing￿the￿flexibility￿of￿our
technically￿skilled￿workforce,￿we￿can￿shorten￿lead-times:￿a￿key￿driver￿of￿added￿value￿to￿our￿customers.

Research￿and￿Development￿
The￿semiconductor￿manufacturing￿industry￿is￿subject￿to￿rapid￿technological￿changes￿driven￿by￿Moore's￿Law.￿We￿believe
that￿continued￿and￿timely￿development￿and￿introduction￿of￿new￿and￿enhanced￿products￿are￿essential￿for￿us￿to￿maintain
our￿competitive￿position.￿As￿a￿result,￿we￿have￿historically￿devoted￿a￿significant￿portion￿of￿our￿financial￿resources
to￿R&D￿programs,￿and￿we￿expect￿to￿continue￿to￿allocate￿significant￿resources￿to￿these￿efforts.￿In￿addition,￿we￿have
established￿sophisticated￿development￿centers￿in￿Veldhoven,￿the￿Netherlands,￿in￿Wilton,￿Connecticut,￿and￿San￿Diego,
California,￿both￿in￿the￿United￿States,￿in￿Pyeongtaek,￿South-Korea￿and￿in￿Linkou,￿Taiwan.￿We￿are￿also￿involved￿in￿joint
R&D￿programs￿with￿both￿public￿and￿private￿partnerships￿and￿consortiums,￿involving￿independent￿research￿centers,
leading￿chip￿manufacturers￿and￿governmental￿programs.￿We￿aim￿to￿own￿or￿license￿our￿jointly￿developed￿technology￿and
designs￿of￿critical￿components.

On￿July￿9,￿2012￿we￿announced￿our￿CCIP￿to￿accelerate￿our￿development￿of￿EUV￿technology￿and￿450mm￿silicon￿wafer
technology.￿This￿program￿created￿risk￿sharing￿with￿some￿of￿our￿largest￿customers￿while￿the￿results￿of￿our￿development
programs￿will￿be￿available￿to￿every￿semiconductor￿manufacturer￿with￿no￿restrictions.

See￿Item￿10.C.￿"Material￿Contracts￿-￿Customer￿Co-Investment￿Program",￿Item￿5.A.￿"Operating￿Results￿-￿Results￿of
Operations￿2014￿Compared￿to￿2013￿-￿Other￿Income"￿and￿Note￿28￿to￿our￿Financial￿Statements.

Furthermore￿during￿2013,￿together￿with￿imec￿(an￿independent￿research￿partner),￿we￿established￿an￿advanced￿patterning
center￿located￿at￿the￿imec￿campus￿in￿Leuven,￿Belgium.￿Together￿we￿plan￿to￿address￿upcoming￿scaling￿challenges￿due￿to
the￿chip￿industry's￿move￿towards￿single￿digit￿nanometer￿dimensions.

As￿of￿2014,￿in￿order￿to￿conduct￿fundamental￿and￿applied￿research￿in￿areas￿that￿are￿key￿to￿unlocking￿innovation￿in￿the
global￿semiconductor￿industry,￿we￿established￿an￿Institute￿for￿Nanolithography￿in￿Amsterdam,￿the￿Netherlands,￿together
with￿FOM/NWO￿and￿UvA/VU.

See￿Item￿4.B.￿"Business￿Overview￿-￿Product￿Development￿and￿Products"￿and￿Item￿5.A.￿"Operating￿Results￿-￿Results￿of
Operations￿2014￿compared￿to￿2013￿-￿Research￿and￿Development￿costs".

Intellectual￿Property￿
We￿rely￿on￿intellectual￿property￿rights￿such￿as￿patents,￿copyrights￿and￿trade￿secrets￿to￿protect￿our￿proprietary
technology.￿We￿aim￿to￿obtain￿ownership￿rights￿on￿technology￿developed￿by￿or￿for￿us,￿alternatively,￿to￿have￿license￿rights
in￿place￿with￿respect￿to￿such￿technology.

In￿2004,￿the￿Nikon￿Cross-License￿Agreement￿was￿signed.￿Under￿the￿Nikon￿Cross-License￿Agreement,￿(i)￿ASML￿granted
Nikon￿a￿non-exclusive￿license￿to￿manufacture￿and￿sell￿lithography￿equipment￿under￿patents￿owned￿or￿otherwise
sublicensable￿by￿ASML￿and￿(ii)￿Nikon￿granted￿ASML￿a￿non-exclusive￿license￿to￿manufacture￿and￿sell￿lithography
equipment￿under￿patents￿owned￿or￿otherwise￿sublicensable￿by￿Nikon.￿These￿license￿grants￿cover￿patents￿having￿an
effective￿application￿date￿before￿December￿31,￿2002￿("Class￿A￿Patents"),￿as￿well￿as￿patents￿with￿an￿effective￿application
date￿after￿December￿31,￿2002￿that￿were￿issued￿worldwide￿before￿the￿end￿of￿2009￿("Class￿B￿Patents"),￿but￿exclude
certain￿specified￿patents￿set￿forth￿in￿the￿Nikon￿Cross-License￿Agreement.￿The￿license￿period￿is￿perpetual￿for￿Class￿A
Patents,￿and￿the￿licenses￿for￿Class￿B￿Patents￿terminated￿at￿the￿end￿of￿2009.

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At￿any￿time￿until￿June￿30,￿2015,￿each￿of￿ASML￿and￿Nikon￿has￿a￿right￿to￿designate￿up￿to￿five￿Class￿B￿patents￿(or￿patents
related￿to￿lithography￿issued￿from￿2010￿to￿2015)￿of￿the￿other￿party￿as￿Class￿A￿patents.￿Any￿patents￿acquired￿after￿the
date￿of￿the￿Nikon￿Cross-License￿Agreement￿are￿deemed￿Class￿B￿Patents.￿In￿addition,￿pursuant￿to￿the￿terms￿of￿the￿Nikon
Cross-License￿Agreement,￿the￿parties￿have￿agreed,￿from￿January￿1,￿2010￿through￿December￿31,￿2014,￿not￿to￿bring
suit￿for￿claims￿related￿to￿infringement￿of￿patents￿issued￿and￿not￿perpetually￿licensed,￿including￿the￿Class￿B￿Patents.
Under￿the￿terms￿of￿the￿Nikon￿Cross-License￿Agreement,￿beginning￿on￿January￿1,￿2015,￿the￿parties￿may￿bring￿suit￿for
infringement￿of￿certain￿patents￿subject￿to￿the￿agreement,￿including￿any￿infringement￿that￿occurred￿from￿January￿1,
2010￿through￿December￿31,￿2014.￿Damages￿resulting￿from￿claims￿for￿patent￿infringement￿occurring￿during￿the￿Cross-
License￿Transition￿Period￿are￿limited￿to￿three￿percent￿of￿the￿net￿sales￿price￿of￿applicable￿licensed￿products￿or￿optical
components.

Accordingly,￿from￿January￿1,￿2015,￿both￿Nikon￿and￿we￿are￿no￿longer￿prohibited￿under￿the￿agreement￿from￿bringing
claims￿against￿each￿other￿on￿the￿basis￿of￿infringement￿of￿certain￿patents￿subject￿to￿the￿Nikon￿Cross-License￿Agreement.

If￿Nikon￿files￿suit￿against￿us￿alleging￿patent￿infringement,￿we￿may￿incur￿substantial￿legal￿fees￿and￿expenses,￿and￿we￿may
not￿prevail.￿Similarly,￿if￿we￿file￿suit￿against￿Nikon￿alleging￿patent￿infringement,￿we￿may￿incur￿substantial￿legal￿fees￿and
expenses,￿and￿we￿may￿not￿prevail.￿Patent￿litigation￿is￿complex￿and￿may￿extend￿for￿a￿protracted￿period￿of￿time,￿giving
rise￿to￿the￿potential￿for￿both￿substantial￿costs￿and￿diverting￿the￿attention￿of￿key￿management￿and￿technical￿personnel.
Potential￿adverse￿outcomes￿from￿patent￿litigation￿may￿include,￿without￿limitation,￿payment￿of￿significant￿monetary
damages,￿injunctive￿relief￿prohibiting￿the￿sale￿of￿products,￿and/or￿settlement￿involving￿significant￿costs￿to￿be￿paid￿by￿us,
any￿of￿which￿may￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and/or￿results￿of￿operations.￿We￿are
unable￿to￿predict￿at￿this￿time￿whether￿any￿such￿patent￿suit￿will￿in￿fact￿materialize,￿or,￿if￿so,￿what￿its￿outcome￿might￿be.

In￿connection￿with￿entering￿into￿the￿Nikon￿Cross-License￿Agreement,￿ASML￿entered￿into￿a￿sublicense￿agreement￿with
Zeiss￿SMT￿AG,￿effective￿November￿12,￿2004,￿pursuant￿to￿which￿Zeiss￿granted￿ASML￿a￿non-exclusive￿license￿of￿all￿of￿the
rights￿it￿received￿from￿Nikon￿under￿the￿Nikon-Zeiss￿Patent￿Cross-License￿Agreement￿between￿Nikon￿and￿Zeiss￿SMT￿AG
effective￿November￿12,￿2004.

In￿2007,￿ASML￿and￿Zeiss￿signed￿an￿agreement￿with￿Canon￿for￿the￿global￿cross-license￿of￿patents￿in￿their￿respective
fields￿of￿semiconductor￿lithography￿and￿optical￿components,￿used￿to￿manufacture￿ICs.￿The￿Canon￿Cross-License
Agreement￿expires￿on￿December￿31,￿2016.

See￿Item￿3.D.￿"Risk￿Factors￿-￿Risks￿Related￿to￿ASML￿-￿Failure￿to￿Adequately￿Protect￿the￿Intellectual￿Property￿Rights
Upon￿Which￿We￿Depend￿Could￿Harm￿Our￿Business"￿and￿"Risk￿Factors￿-￿Risks￿Related￿to￿ASML￿-￿Defending￿Against
Intellectual￿Property￿Claims￿Brought￿by￿Others￿Could￿Harm￿Our￿Business".

Competition
The￿semiconductor￿equipment￿industry￿is￿highly￿competitive.￿The￿principal￿elements￿of￿competition￿in￿our￿market￿are:
• The￿technical￿performance￿characteristics￿of￿a￿lithography￿system;
• The￿value￿of￿ownership￿of￿lithography￿systems￿based￿on￿purchase￿price,￿maintenance￿costs,￿throughput,￿and

customer￿service￿and￿support￿costs;

• The￿exchange￿rate￿of￿the￿euro￿particularly￿against￿the￿Japanese￿yen;
• The￿strength￿and￿breadth￿of￿our￿portfolio￿of￿patents￿and￿other￿intellectual￿property￿rights;￿and
• Our￿customers’￿desire￿to￿obtain￿lithography￿equipment￿from￿more￿than￿one￿supplier.

We￿believe￿that￿the￿market￿for￿lithography￿systems￿and￿the￿investments￿required￿to￿be￿a￿significant￿competitor￿in￿this
market￿segment￿has￿resulted￿in￿increased￿competition￿for￿market￿share￿through￿aggressive￿prosecution￿of￿patents.￿Our
competitiveness￿depends￿upon￿our￿ability￿to￿protect￿and￿defend￿our￿patents,￿as￿well￿as￿our￿ability￿to￿develop￿new￿and
enhanced￿semiconductor￿equipment￿that￿is￿competitively￿priced￿and￿introduced￿on￿a￿timely￿basis.

Government￿Regulation
Our￿business￿is￿subject￿to￿direct￿and￿indirect￿regulations￿in￿each￿of￿the￿countries￿in￿which￿our￿customers￿or￿we￿do
business.￿As￿a￿result,￿changes￿in￿various￿types￿of￿regulations￿could￿affect￿our￿business￿adversely.￿The￿implementation
of￿new￿safety,￿environmental￿or￿legal￿requirements￿could￿impact￿our￿products,￿or￿our￿manufacturing￿or￿distribution
processes,￿and￿could￿affect￿the￿timing￿of￿product￿introductions,￿the￿cost￿of￿our￿production,￿and￿products￿as￿well￿as￿their
commercial￿success.￿The￿impact￿of￿these￿changes￿in￿regulation￿could￿adversely￿affect￿our￿business,￿financial￿condition
and￿our￿results￿of￿operations￿even￿where￿the￿specific￿regulations￿do￿not￿directly￿apply￿to￿us￿or￿to￿our￿products.

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C. Organizational Structure
ASML￿Holding￿N.V.￿is￿a￿holding￿company￿that￿operates￿through￿its￿subsidiaries.￿Our￿major￿operating￿subsidiaries,￿each
of￿which￿is￿ultimately￿wholly-owned￿by￿ASML￿Holding￿N.V.,￿are￿ASML￿Netherlands￿B.V.,￿ASML￿Systems￿B.V.,￿ASML￿Hong
Kong￿Ltd.￿and￿ASML￿US￿Inc.

See￿Exhibit￿8.1￿for￿a￿list￿of￿our￿main￿subsidiaries.

D. Property, Plant and Equipment
We￿lease￿a￿number￿of￿our￿facilities￿under￿operating￿leases.￿We￿also￿own￿a￿number￿of￿buildings,￿mainly￿consisting￿of
production￿facilities￿in￿Veldhoven,￿the￿Netherlands,￿in￿Wilton,￿Connecticut,￿and￿San￿Diego,￿California,￿both￿in￿the￿United
States,￿in￿Pyeongtaek,￿South-Korea￿and￿in￿Linkou,￿Taiwan.￿The￿book￿value￿of￿land,￿buildings￿and￿constructions￿owned
amount￿to￿EUR￿973.4￿million￿as￿of￿December￿31,￿2014￿compared￿with￿EUR￿797.5￿million￿as￿of￿December￿31,￿2013.￿See
Note￿12￿to￿our￿Financial￿Statements.

Subject￿to￿market￿conditions,￿we￿expect￿that￿our￿capital￿expenditures￿(purchases￿of￿property,￿plant￿and￿equipment)￿in
2015￿will￿be￿approximately￿EUR￿410￿million.￿These￿expenditures￿will￿mainly￿consist￿of￿investments￿used￿for￿the￿further
expansion￿of￿our￿EUV￿production￿facilities￿enabling￿us￿to￿meet￿future￿demand￿for￿EUV￿systems.￿We￿expect￿to￿finance
these￿capital￿expenditures￿through￿cash￿generated￿by￿operations￿and￿existing￿cash￿and￿cash￿equivalents.

Facilities￿in￿Europe
Our￿headquarters,￿main￿manufacturing￿facilities,￿applications￿laboratory￿and￿R&D￿facilities￿are￿located￿at￿a￿single￿site
in￿Veldhoven,￿the￿Netherlands.￿This￿state-of-the-art￿facility￿includes￿65￿thousand￿square￿meter￿of￿office￿space￿and￿42
thousand￿square￿meters￿of￿cleanroom￿used￿for￿manufacturing￿and￿R&D￿activities￿and￿24￿thousand￿square￿meters￿of
warehouses.￿Our￿facilities￿in￿Veldhoven,￿the￿Netherlands￿are￿partly￿owned￿and￿partly￿leased￿through￿long-term￿operating
leases￿that￿contain￿purchase￿options.￿Some￿of￿our￿office￿facilities￿at￿our￿headquarters￿in￿Veldhoven,￿the￿Netherlands,￿are
financed￿through￿a￿special￿purpose￿vehicle￿that￿is￿a￿VIE.￿We￿also￿lease￿several￿sales￿and￿service￿facilities￿at￿locations
across￿Europe.

Facilities￿in￿the￿United￿States
Our￿United￿States￿head￿office￿is￿located￿in￿a￿5￿thousand￿square￿meter￿office￿building￿in￿Chandler,￿Arizona.￿We￿maintain
R&D￿and￿manufacturing￿operations￿in￿a￿28￿thousand￿square￿meter￿facility￿in￿Wilton,￿Connecticut,￿and￿a￿5￿thousand
square￿meter￿facility￿in￿Santa￿Clara,￿California.￿Furthermore,￿our￿facilities￿in￿San￿Diego￿include￿50￿thousand￿square
meters￿of￿buildings￿used￿for￿cleanroom,￿manufacturing,￿R&D￿activities,￿warehousing￿and￿office￿space.

Facilities￿in￿Asia
Our￿Asian￿headquarters￿is￿located￿in￿a￿425￿square￿meter￿office￿space￿in￿Hong￿Kong,￿The￿People's￿Republic￿of￿China.
In￿addition,￿our￿ACE￿facility￿in￿Linkou,￿Taiwan￿comprises￿a￿cleanroom￿(approximately￿3￿thousand￿square￿meters)￿and
office￿space￿(approximately￿6￿thousand￿square￿meters).￿Our￿facility￿in￿Korea￿comprises￿of￿a￿cleanroom￿(approximately
700￿square￿meters)￿and￿office￿space￿(approximately￿6￿thousand￿square￿meters).￿We￿also￿lease￿and￿own￿several￿sales,
service￿and￿training￿facilities￿at￿locations￿across￿Asia.￿As￿a￿result￿of￿the￿Cymer￿acquisition,￿we￿acquired￿a￿manufacturing
facility￿in￿Pyeongtaek,￿South￿Korea,￿mainly￿used￿for￿refurbishment￿activities￿of￿light￿sources.￿Additionally,￿Cymer￿leases
various￿smaller￿locations￿accross￿Asia￿which￿are￿mainly￿used￿for￿local￿sales￿and￿service￿activities.

Item 4A Unresolved Staff Comments

Not￿applicable.

Item 5 Operating and Financial Review and Prospects  

In￿the￿Executive￿Summary￿included￿below,￿we￿provide￿an￿update￿on￿the￿Semiconductor￿Equipment￿Industry,￿followed
by￿a￿discussion￿of￿our￿Business￿Strategy,￿Profitability,￿ASML￿Operations￿Update￿on￿Key￿Performance￿Indicators￿and
Backlog.￿All￿information￿disclosed￿in￿this￿item￿is￿provided￿as￿a￿supplement￿to,￿and￿should￿be￿read￿in￿conjunction￿with,
our￿Financial￿Statements￿and￿the￿accompanying￿Notes￿to￿the￿Consolidated￿Financial￿Statements￿included￿in￿Item￿18
"Financial￿Statements".

ASML￿ANNUAL￿REPORT￿2014

21

Executive Summary

Introduction
ASML￿makes￿possible￿affordable￿microelectronics￿that￿improve￿the￿quality￿of￿life.￿ASML￿invents￿and￿develops￿complex
technology￿for￿high-tech￿lithography￿systems￿for￿the￿semiconductor￿industry.￿ASML's￿guiding￿principle￿is￿continuing
Moore's￿Law￿towards￿ever￿smaller,￿cheaper,￿more￿powerful￿and￿energy-efficient￿semiconductors.￿Our￿success￿is￿based
on￿three￿pillars:￿technology￿leadership￿combined￿with￿customer￿and￿supplier￿intimacy,￿highly￿efficient￿processes
and￿entrepreneurial￿people.￿We￿are￿a￿multinational￿company￿with￿over￿70￿locations￿in￿16￿countries,￿headquartered￿in
Veldhoven,￿the￿Netherlands.￿As￿of￿December￿31,￿2014,￿we￿employed￿11,318￿payroll￿employees￿(2013:￿10,360)￿and￿2,754
temporary￿employees￿(2013:￿2,865),￿measured￿in￿FTEs.￿ASML￿is￿traded￿on￿Euronext￿Amsterdam￿and￿NASDAQ￿under￿the
symbol￿ASML.

Semiconductor￿Equipment￿Industry
The￿chip-making￿business￿is￿focused￿on￿"shrink",￿or￿reducing￿the￿size￿of￿chip￿designs,￿as￿a￿driver￿of￿cost￿reduction￿and
increased￿functionality.￿The￿worldwide￿electronics￿and￿computer￿industries￿have￿experienced￿significant￿growth￿since
the￿commercialization￿of￿ICs￿in￿the￿1960s,￿largely￿due￿to￿the￿continuous￿reduction￿of￿cost￿per￿function￿performed￿by￿ICs.
Improvement￿in￿the￿design￿and￿manufacture￿of￿ICs￿with￿higher￿circuit￿or￿"packing"￿densities￿has￿resulted￿in￿smaller￿and
lower￿cost￿ICs,￿capable￿of￿performing￿a￿larger￿number￿of￿functions￿at￿higher￿throughput￿levels￿and￿with￿reduced￿power
consumption.￿We￿believe￿that￿these￿long-term￿trends￿will￿continue￿for￿the￿foreseeable￿future￿and￿will￿be￿accompanied
by￿a￿continuing￿demand,￿subject￿to￿ongoing￿cyclical￿variation￿and￿semiconductor￿industry￿volatility,￿for￿production
equipment￿that￿can￿accurately￿produce￿advanced￿ICs￿in￿high￿volumes￿at￿the￿lowest￿possible￿cost.

See￿item￿4.B.￿"Business￿Overview￿-￿Product￿Development￿and￿Products".

The￿costs￿to￿develop￿new￿lithography￿equipment￿are￿high.￿Accordingly,￿the￿lithography￿equipment￿industry￿is
characterized￿by￿the￿presence￿of￿only￿a￿few￿suppliers:￿ASML,￿Nikon,￿and￿Canon.￿In￿2014,￿ASML￿was￿one￿of￿the￿world’s
leading￿providers￿of￿lithography￿equipment￿(measured￿in￿revenues￿based￿upon￿Gartner￿Dataquest￿fourth￿quarter￿2014
report).

Total￿lithography￿equipment￿shipped￿by￿the￿industry￿as￿a￿whole￿in￿the￿six￿years￿ended￿December￿31,￿2014,￿is￿set￿out￿in
the￿following￿table:

Year ended December 31

2014 1

2013 2

2012 2

2011 2

2010 2

2009 2

Total￿units￿shipped
Total￿value￿(in￿millions￿USD)

232
6,854

243
6,085

252
6,058

376
8,225

304
6,416

128
2,485

1
2

Historical￿data￿and￿full-year￿2014￿estimates￿as￿reported￿by￿Gartner￿Dataquest￿in￿its￿fourth￿quarter￿2014￿report.
Historical￿data￿are￿based￿on￿figures￿as￿included￿in￿the￿Gartner￿Dataquest￿fourth￿quarter￿2014￿report.￿Where￿appropriate,￿the￿estimates￿as￿included￿in
the￿Gartner￿Dataquest￿reports￿in￿prior￿years￿have￿been￿updated￿based￿on￿this￿fourth￿quarter￿2014￿report.

For￿the￿year￿2014,￿the￿latest￿indications￿of￿independent￿market￿analysts￿show￿a￿decrease￿in￿total￿lithography￿equipment
shipped￿to￿the￿market￿of￿4.5￿percent￿in￿unit￿volume￿and￿an￿increase￿of￿12.6￿percent￿in￿value.￿In￿2014￿ASML￿sold￿136
systems,￿compared￿to￿157￿in￿2013.￿However,￿our￿net￿system￿sales￿also￿increased￿6.3￿percent￿(mainly￿NXE:3300B)￿in
2014￿compared￿to￿2013.

Business￿Strategy
General
The￿long-term￿growth￿of￿the￿semiconductor￿industry￿is￿based￿on￿the￿principle￿that￿the￿power,￿cost￿and￿time￿required
for￿every￿computation￿on￿a￿digital￿electronic￿device￿can￿be￿reduced￿by￿shrinking￿the￿size￿of￿transistors￿on￿chips.
In￿2014,￿chip￿makers￿routinely￿produced￿electronic￿chip￿features￿with￿geometries￿of￿20￿nm,￿compared￿to￿typical
geometries￿of￿10,000￿nm￿in￿the￿early￿1970s,￿resulting￿in￿an￿increase￿in￿the￿number￿of￿transistors￿on￿leading￿chips
from￿several￿thousand￿to￿over￿two￿billion.￿This￿trend￿was￿first￿observed￿by￿Intel￿co-founder￿Gordon￿Moore￿in￿1965,
and￿is￿referred￿to￿as￿"Moore’s￿Law".￿Moore’s￿Law￿is￿reflected￿in￿ever￿smaller,￿cheaper,￿more￿powerful￿and￿energy-
efficient￿semiconductors.￿Smaller￿geometries￿allow￿for￿much￿lower￿electrical￿currents￿to￿operate￿the￿chip.￿This￿has
helped￿to￿stabilize￿the￿world’s￿energy￿consumption￿despite￿the￿proliferation￿of￿affordable￿computing.￿Using￿advanced
semiconductors￿in￿industrial￿and￿consumer￿products￿often￿provides￿economic￿benefits,￿user-friendliness￿and￿increased
safety.￿The￿technology￿revolution￿powered￿by￿the￿semiconductor￿industry￿has￿brought￿many￿advantages:￿not￿only￿can
information￿be￿more￿widely￿disseminated￿than￿ever￿before,￿affordable￿chip￿intelligence￿has￿also￿enabled￿industry￿and
service￿sectors￿to￿create￿and￿distribute￿products￿and￿ideas￿at￿lightning￿speed.

ASML￿ANNUAL￿REPORT￿2014

22

Our￿vision￿is￿that￿ASML￿makes￿possible￿affordable￿microelectronics￿that￿improve￿the￿quality￿of￿life.￿What￿we￿do￿to
realize￿our￿vision￿is￿to￿invent,￿develop￿and￿manufacture￿high-tech￿lithography,￿metrology￿and￿software￿solutions￿for￿the
semiconductor￿industry￿that￿provide￿the￿"patterning"￿of￿chips￿and￿hence￿enable￿the￿creation￿of￿smarter,￿smaller￿and
more￿energy-efficient￿chips.￿We￿implement￿our￿vision￿and￿mission￿by￿executing￿our￿business￿strategy￿which￿consists￿of
three￿elements:

1.￿Providing￿leading￿technology￿and￿cost-effective￿products￿and￿services￿for￿patterning￿of￿semiconductor￿devices;
2.￿Strong￿relationships￿with￿customers￿as￿well￿as￿suppliers￿and￿peers￿to￿drive￿the￿patterning￿eco-system;￿and
3.￿Develop￿our￿people￿and￿organization￿to￿support￿our￿growing￿business￿and￿industry.
When￿executed,￿this￿strategy￿results￿in￿the￿delivery￿of￿lithography￿systems￿which￿enable￿customers￿to￿produce￿chips￿at
lower￿costs￿and￿with￿higher￿value￿per￿product.￿The￿superior￿value￿of￿ownership￿offered￿to￿customers￿as￿a￿result￿of￿our
strategy￿also￿drives￿our￿own￿financial￿performance,￿aligning￿the￿interests￿of￿ASML￿and￿our￿customers.

Leading Technology and Cost Effective Products
Our￿customers￿need￿lithography￿scanners￿that￿continuously￿improve￿performance￿in￿three￿areas:￿imaging,￿throughput
and￿overlay.￿Because￿the￿image￿of￿the￿electronic￿chip￿circuit￿must￿be￿extremely￿small￿(in￿2014￿chip￿makers￿routinely
produced￿electronic￿chip￿features￿with￿geometries￿of￿20￿nm),￿the￿system￿must￿be￿able￿to￿image￿billions￿of￿these￿features
every￿second￿and￿it￿must￿be￿able￿to￿do￿that￿with￿extreme￿precision￿of￿just￿a￿few￿nm￿(one￿nm￿is￿four￿silicon￿atoms).￿To
realize￿and￿improve￿system￿performance￿for￿our￿customers￿on￿all￿three￿mentioned￿areas￿above,￿ASML￿needs￿to￿deliver
the￿right￿technology￿at￿the￿right￿time￿to￿meet￿long-term￿roadmaps￿of￿our￿customers￿which￿often￿extend￿many￿years￿into
the￿future￿and￿are￿driven￿primarily￿by￿a￿desire￿to￿maintain￿Moore's￿Law.￿Therefore,￿ASML￿is￿committed￿to￿significant
long-term￿investments￿in￿R&D.

In￿order￿to￿meet￿the￿imaging,￿throughput￿and￿overlay￿demands￿of￿our￿customers,￿we￿have￿focused￿our￿R&D￿investments
on￿three￿core￿programs:￿EUV,￿DUV￿and￿holistic￿lithography￿solutions.￿In￿2014,￿our￿R&D￿costs￿(net￿of￿credits)￿amounted
to￿EUR￿1,074.1￿million￿(2013:￿EUR￿882.0￿million;￿2012:￿EUR￿589.2￿million).￿A￿significant￿part￿of￿our￿R&D-budget￿has
been￿used￿for￿R&D￿jointly￿developed￿with￿our￿suppliers￿and￿technology￿partners.￿In￿addition,￿as￿part￿of￿the￿CCIP,
Participating￿Customers￿are￿funding￿development￿costs￿relating￿to￿lithography￿projects￿and￿in￿2014,￿we￿recognized
other￿income￿in￿relation￿to￿the￿contributions￿made￿by￿certain￿Participating￿Customers￿of￿EUR￿81.0￿million￿(2013:￿EUR
64.4￿million;￿2012:￿nil)￿in￿connection￿with￿the￿CCIP.

For￿further￿details￿on￿our￿product￿development￿and￿products,￿see￿Item￿4.B.￿"Business￿Overview￿-￿Product￿Development
and￿Products".

Strong Relations with Customers, Suppliers and Peers
Ensuring￿customers￿are￿served￿with￿the￿right￿products￿at￿the￿right￿time￿and￿supported￿by￿excellent￿service,￿is￿key￿to￿our
commitment￿to￿a￿long-term￿relationship.￿With￿high-valued￿products,￿customers￿expect￿high-quality￿support￿customized
to￿their￿specific￿requirements.￿This￿support￿includes￿service￿engineers,￿equipped￿with￿the￿latest￿technical￿information,
to￿ensure￿the￿highest￿level￿of￿system￿performance,￿as￿well￿as￿applications￿specialists￿who￿support￿optimal￿system
processing￿and￿new￿product￿implementation.

ASML￿aims￿to￿deliver￿lithography￿systems￿with￿the￿lowest￿cost￿of￿ownership.

Customer￿satisfaction￿is￿a￿critical￿objective￿of￿ASML.￿We￿have￿account￿teams￿that￿are￿specifically￿dedicated￿to￿customer
satisfaction￿throughout￿the￿lifecycle￿of￿our￿products.

Through￿2014,￿all￿of￿the￿top￿10￿chipmakers￿worldwide,￿in￿terms￿of￿semiconductor￿capital￿expenditure,￿were￿our
customers.￿We￿also￿have￿a￿significant￿share￿of￿customers￿outside￿the￿top￿10.￿We￿strive￿for￿continued￿business￿growth
with￿all￿our￿customers.￿We￿expect￿that￿customer￿concentration￿might￿increase￿because￿of￿continuing￿consolidation￿in
the￿semiconductor￿manufacturing￿industry.

See￿Item￿3.D.￿"Risk￿Factors￿-￿Risks￿Related￿to￿ASML￿-￿A￿High￿Percentage￿of￿Net￿Sales￿Is￿Derived￿from￿a￿Few
Customers".

In￿2014,￿our￿satisfaction￿ratings￿by￿customers￿surpassed￿every￿lithography￿competitor.￿According￿to￿VLSI￿Research,
ASML￿ranks￿second￿among￿the￿large￿semiconductor￿industry￿equipment￿suppliers￿and￿first￿among￿lithography
competitors.￿Our￿performance￿has￿consistently￿been￿strong:￿for￿twelve￿years￿in￿a￿row￿we￿have￿both￿ranked￿among￿the
top￿5￿semiconductor￿industry￿suppliers￿and￿our￿ranking￿surpassed￿that￿of￿any￿of￿our￿lithography￿competitors.

Another￿significant￿pillar￿in￿our￿business￿strategy￿is￿close￿relations￿with￿suppliers.￿They￿provide￿us￿with￿components,
modules￿and￿sub-systems￿according￿to￿our￿specifications.

ASML￿ANNUAL￿REPORT￿2014

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Develop our People and Organization to Support our Growing Business and Industry
The￿nature￿of￿our￿R&D￿intensive￿business￿depends￿on￿a￿highly￿skilled￿work￿force￿and￿efficient￿organization￿that￿boosts
inspiration￿and￿engagement.

We￿therefore￿take￿training￿and￿development￿very￿seriously,￿of￿our￿payroll￿and￿non-payroll￿employees￿alike.￿Long-term
employability￿through￿continuous￿development￿is￿important￿for￿the￿well-being￿of￿our￿employees,￿for￿ASML￿and￿for
society.

As￿the￿expectations￿of￿our￿customers￿continue￿to￿increase,￿leading￿to￿more￿complex￿products￿and￿stakeholder
interactions,￿it￿is￿essential￿we￿continuously￿look￿for￿efficiencies.￿We￿therefore￿continue￿to￿improve￿our￿organization￿in
view￿of￿the￿volatility￿of￿the￿semiconductor￿industry,￿the￿long-term￿growth￿of￿our￿business,￿and￿the￿engagement￿of￿our
employees.

The￿three￿elements￿which￿make￿up￿our￿business￿strategy￿are￿complemented￿with￿responsible￿behavior￿as￿prerequisite￿in
executing￿this￿strategy.￿The￿next￿section￿summarizes￿CR￿within￿our￿company.

Corporate Responsibility
More￿than￿delivering￿strong￿financial￿performance,￿we￿want￿to￿create￿long-term￿value￿for￿our￿stakeholders￿and￿for
society￿as￿a￿whole.￿To￿this￿end,￿we￿identify￿and￿manage￿non-financial￿developments￿that￿are￿material￿to￿our￿business
and￿performance.￿Investing￿in￿these￿non-financial￿or￿CR￿themes￿is￿a￿prerequisite￿for￿our￿long-term￿business￿continuity
and￿success.￿We￿believe￿that￿we￿can￿significantly￿enhance￿our￿long-term￿performance￿if￿we￿successfully￿manage￿the
risks￿associated￿with￿these￿developments￿and￿seize￿the￿opportunities￿they￿offer.

In￿2014,￿we￿moved￿CR￿higher￿on￿our￿business￿agenda.￿We￿have￿further￿developed￿our￿new￿CR￿strategy￿and￿policy￿that
formulates￿our￿ambitions￿for￿the￿period￿2015-2020.￿It￿sets￿out￿the￿main￿non-financial,￿social￿and￿environmental￿impact
areas￿and￿most￿significant￿indicators￿we￿will￿use￿to￿measure￿our￿progress.￿We￿believe￿this￿is￿an￿important￿step￿towards
further￿aligning￿our￿CR￿objectives￿with￿our￿business￿strategy￿and￿a￿significant￿step￿towards￿integrating￿financial￿and
non-financial￿reporting.

To￿celebrate￿our￿company’s￿30th￿anniversary￿on￿April￿1,￿2014￿we￿launched￿'30￿for￿Change',￿a￿global￿initiative￿with￿the
ASML￿Foundation￿to￿support￿29￿projects￿reflecting￿ASML's￿diversity￿and￿empowering￿underprivileged￿youth￿through
education.￿Our￿employees￿worldwide￿worked￿together￿in￿submitting,￿selecting￿and￿raising￿funds￿for￿the￿charity￿projects.
These￿projects￿strengthen￿our￿bonds￿with￿the￿community￿but￿at￿the￿same￿time￿contribute￿to￿employee￿involvement￿and
our￿need￿to￿have￿access￿to￿the￿largest￿possible￿pool￿of￿technical￿talent.

The￿2014￿CR￿Report￿describes￿our￿CR￿strategy,￿achievements￿and￿contributions￿to￿sustainable￿business￿practices.￿The
2014￿CR￿Report￿can￿be￿found￿on￿our￿Website.￿Information￿on￿ASML's￿Website￿is￿not￿incorporated￿into,￿and￿does￿not
form￿a￿part￿of,￿this￿Annual￿Report.

Profitability
Our￿long￿term￿business￿model￿target￿requires￿us￿to￿achieve￿annual￿income￿from￿operations￿as￿percentage￿of￿net￿sales
of￿greater￿than￿30￿percent.￿However￿in￿exceptional￿circumstances,￿as￿evidenced￿by￿the￿financial￿and￿economic￿crisis￿in
2008-2009,￿we￿could￿see￿periods￿with￿income￿from￿operations￿that￿are￿substantially￿below￿our￿minimum￿target￿level.

ASML￿ANNUAL￿REPORT￿2014

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ASML￿Operations￿Update￿on￿Key￿Performance￿Indicators
The￿following￿table￿presents￿the￿key￿performance￿indicators￿used￿by￿our￿BoM￿and￿senior￿management￿to￿regularly
measure￿performance.

Year ended December 31
(in millions)

2014
EUR

%1

2013
EUR

%1

2012
EUR

%1

Sales
Net￿sales
Increase￿(decrease)￿in￿net￿sales￿(%)
Net￿system￿sales
Net￿service￿and￿field￿option￿sales
Sales￿of￿systems￿(in￿units)
ASP￿of￿total￿system￿sales
ASP￿of￿new￿system￿sales
ASP￿of￿used￿system￿sales
Value￿of￿systems￿backlog
Systems￿backlog￿(in￿units)
ASP￿of￿systems￿backlog
ASP￿of￿systems￿backlog￿(New)
ASP￿of￿systems￿backlog￿(Used)
Immersion￿systems￿recognized￿(in￿units)￿3
NXE:3300B￿systems￿recognized￿(in￿units)
Profitability
Gross￿profit
Income￿from￿operations
Net￿income
Liquidity
Cash￿and￿cash￿equivalents
Short-term￿investments
Operating￿cash￿flow

5,856.3
11.6
4,242.8
1,613.5
136
31.2
35.6
5.8
2,772.4 2
82 2
33.8 2
42.0 2
4.7 2
76
5

2,596.4
1,282.2
1,196.6

2,419.5
334.9
1,025.2

44.3
21.9
20.4

5,245.3
10.9
3,993.1
1,252.2
157
25.4
27.4
6.9
1,953.3
56
34.9
41.4
4.7
77
1

2,177.2
1,047.9
1,015.5

2,330.7
679.9
1,054.2

41.5
20.0
19.4

4,731.5
(16.3)
3,801.6
929.9
170
22.4
24.8
7.6
1,214.1
46
26.4
29.8
4.0
72
-

2,005.2
1,156.8
1,146.3

1,767.6
930.0
703.5

42.4
24.4
24.2

1
2

3

As￿a￿percentage￿of￿net￿sales.
Our￿systems￿backlog￿and￿net￿bookings￿include￿sales￿orders￿for￿which￿written￿authorizations￿have￿been￿accepted￿and￿shipment￿and/or￿revenue
recognition￿is￿expected￿within￿12￿months.￿As￿of￿2014￿we￿also￿include￿EUV￿in￿our￿backlog￿starting￿with￿our￿NXE:3350B￿systems.￿As￿a￿result,￿two
NXE:3350B￿systems￿are￿now￿included￿in￿our￿systems￿backlog￿and￿net￿bookings.￿Before￿2014,￿our￿systems￿backlog￿and￿net￿bookings￿include￿only
sales￿orders￿for￿which￿written￿authorizations￿have￿been￿accepted￿and￿system￿shipment￿and￿revenue￿recognition￿dates￿within￿the￿following￿12￿months
have￿been￿assigned.￿This￿change￿has￿no￿impact￿on￿the￿comparative￿figures.
Included￿in￿the￿total￿number￿of￿immersion￿systems￿recognized￿in￿2014￿are￿48￿units￿of￿our￿most￿advanced￿immersion￿technology￿NXT:1970Ci￿systems
(2013:￿4￿and￿2012:￿nil).

Backlog
We￿started￿2014￿with￿a￿systems￿backlog￿of￿56￿systems.￿In￿2014,￿we￿booked￿orders￿for￿157￿systems,￿and￿recognized
sales￿for￿136￿systems￿(including￿5￿NXE:3300B￿systems,￿which￿were￿not￿included￿in￿backlog).￿This￿resulted￿in￿a￿systems
backlog￿of￿82￿as￿of￿December￿31,￿2014.

As￿of￿December￿31,￿2014,￿our￿systems￿backlog￿was￿valued￿at￿EUR￿2,772.4￿million￿and￿includes￿82￿systems￿with￿an￿ASP
of￿EUR￿33.8￿million.￿As￿of￿December￿31,￿2013,￿the￿systems￿backlog￿was￿valued￿at￿EUR￿1,953.3￿million￿and￿included￿56
systems￿with￿an￿ASP￿of￿EUR￿34.9￿million.￿The￿ASP￿of￿our￿systems￿backlog￿mainly￿decreased￿in￿2014￿compared￿to￿2013
as￿a￿result￿of￿a￿shift￿in￿the￿mix￿towards￿KrF,￿partly￿offset￿by￿the￿inclusion￿of￿two￿NXE:3350B￿systems.

For￿discussion￿on￿the￿main￿key￿performance￿indicators￿indicated￿above,￿see￿Item￿5.A.￿"Operating￿Results"￿and￿Item￿5.B.
"Liquidity￿and￿Capital￿Resources".

ASML￿ANNUAL￿REPORT￿2014

25

A. Operating Results

Critical￿Accounting￿Policies￿Using￿Significant￿Estimates￿
Our￿discussion￿and￿analysis￿of￿our￿financial￿condition￿and￿results￿of￿operations￿are￿based￿upon￿our￿Financial
Statements,￿which￿have￿been￿prepared￿in￿conformity￿with￿US￿GAAP.￿The￿preparation￿of￿our￿Financial￿Statements
requires￿us￿to￿make￿estimates￿and￿assumptions￿that￿affect￿the￿reported￿amounts￿of￿assets￿and￿liabilities￿and￿the
disclosure￿of￿contingent￿assets￿and￿liabilities￿on￿the￿balance￿sheet￿dates,￿and￿the￿reported￿amounts￿of￿net￿sales
and￿costs￿during￿the￿reported￿periods.￿Actual￿results￿could￿differ￿from￿those￿estimates.￿We￿evaluate￿our￿estimates
continuously￿and￿we￿base￿our￿estimates￿on￿historical￿experience￿and￿on￿various￿other￿assumptions￿that￿we￿believe￿to￿be
reasonable￿under￿the￿circumstances.￿Actual￿results￿may￿differ￿from￿these￿estimates￿if￿the￿assumptions￿prove￿incorrect.
To￿the￿extent￿there￿are￿material￿differences￿between￿actual￿results￿and￿these￿estimates,￿our￿future￿results￿could￿be
materially￿and￿adversely￿affected.￿We￿believe￿that￿the￿accounting￿policies￿described￿below￿require￿us￿to￿make￿significant
judgments￿and￿estimates￿in￿the￿preparation￿of￿our￿Financial￿Statements.￿Our￿most￿critical￿accounting￿estimates￿include:
• Revenue￿Recognition;
•
•
• Contingencies￿and￿Litigation;￿and
• Evaluation￿of￿Long-lived￿Assets￿for￿Impairment.

Inventories;
Income￿Taxes;

See￿Note￿1￿to￿our￿Financial￿Statements￿for￿a￿summary￿of￿our￿significant￿accounting￿policies.

Results￿of￿Operations￿2014￿Compared￿to￿2013
The￿following￿discussion￿and￿analysis￿of￿Results￿of￿Operations￿should￿be￿viewed￿in￿the￿context￿of￿the￿risks￿that￿may
interfere￿with￿our￿business￿objectives￿or￿otherwise￿affect￿our￿results￿of￿operations,￿described￿in￿Item￿3.D.￿"Risk￿Factors".

Set￿out￿below￿our￿Consolidated￿Statements￿of￿Operations￿data￿for￿the￿years￿ended￿December￿31,￿2014￿and￿2013:

Year ended December 31
(in millions)

Total￿net￿sales
Cost￿of￿sales
Gross￿profit
Other￿income
Research￿and￿development￿costs
Selling,￿general￿and￿administrative￿costs
Income￿from￿operations
Interest￿and￿other,￿net
Income￿before￿income￿taxes
Provision￿for￿income￿taxes
Net￿income

2014
EUR

5,856.3
(3,259.9)
2,596.4
81.0
(1,074.1)
(321.1)
1,282.2
(8.6)
1,273.6
(77.0)
1,196.6

2013
EUR

5,245.3
(3,068.1)
2,177.2
64.4
(882.0)
(311.7)
1,047.9
(24.4)
1,023.5
(8.0)
1,015.5

Set￿out￿below￿are￿our￿Consolidated￿Statements￿of￿Operations￿data￿for￿the￿years￿ended￿December￿31,￿2014￿and￿2013
expressed￿as￿a￿percentage￿of￿our￿total￿net￿sales:

Year ended December 31

Total￿net￿sales
Cost￿of￿sales
Gross￿profit
Other￿income
Research￿and￿development￿costs
Selling,￿general￿and￿administrative￿costs
Income￿from￿operations
Interest￿and￿other,￿net
Income￿before￿income￿taxes
Provision￿for￿income￿taxes
Net￿income

2014
%

100.0
(55.7)
44.3
1.4
(18.3)
(5.5)
21.9
(0.1)
21.7
(1.3)
20.4

2013
%

100.0
(58.5)
41.5
1.2
(16.8)
(5.9)
20.0
(0.5)
19.5
(0.1)
19.4

ASML￿ANNUAL￿REPORT￿2014

26

Net Sales and Gross Profit
The￿following￿table￿shows￿a￿summary￿of￿sales￿data,￿units￿sold,￿gross￿profit￿and￿ASP￿data￿for￿the￿years￿ended￿December
31,￿2014￿and￿2013:

Year ended December 31
(in millions EUR, unless otherwise indicated)
Net￿sales
Net￿system￿sales
Net￿service￿and￿field￿option￿sales
Total￿sales￿of￿systems￿(in￿units)
Total￿sales￿of￿new￿systems￿(in￿units)
Total￿sales￿of￿used￿systems￿(in￿units)
Gross￿profit￿as￿a￿percentage￿of￿net￿sales
ASP￿of￿system￿sales
ASP￿of￿new￿system￿sales
ASP￿of￿used￿system￿sales

2014

2013

5,856.3
4,242.8
1,613.5
136
116
20
44.3
31.2
35.6
5.8

5,245.3
3,993.1
1,252.2
157
142
15
41.5
25.4
27.4
6.9

Net￿sales￿increased￿by￿EUR￿611.0￿million,￿or￿11.6￿percent,￿to￿EUR￿5,856.3￿million￿in￿2014￿from￿EUR￿5,245.3￿million￿in
2013,￿mainly￿driven￿by￿the￿increase￿in￿net￿service￿and￿field￿option￿sales￿of￿EUR￿361.3￿million,￿or￿28.9￿percent￿to￿EUR
1,613.5￿million￿in￿2014￿from￿EUR￿1,252.2￿million￿in￿2013.￿The￿increase￿in￿net￿service￿and￿field￿option￿sales￿is￿mainly
caused￿by:
• The￿full-year￿effect￿of￿Cymer￿in￿2014,￿whereas￿2013￿only￿includes￿Cymer￿for￿seven￿months;￿and
• Holistic￿Lithography￿increased￿through￿the￿sales￿of￿integrated￿metrology￿and￿feedback￿loop￿technology.

The￿increase￿in￿net￿system￿sales￿of￿EUR￿249.7￿million,￿or￿6.3￿percent,￿to￿EUR￿4,242.8￿million￿in￿2014￿from￿EUR￿3,993.1
million￿in￿2013￿is￿caused￿by￿higher￿NXE:3300B￿system￿sales.

The￿increase￿of￿the￿ASP￿of￿our￿systems￿sold￿can￿mainly￿be￿explained￿by￿the￿ASP￿of￿our￿new￿systems￿sold￿which
increased￿to￿EUR￿35.6￿million￿in￿2014￿from￿EUR￿27.4￿million￿in￿2013,￿which￿was￿the￿result￿of￿a￿shift￿in￿the￿mix￿of
systems￿sold￿towards￿more￿high-end￿system￿types￿(NXE:3300B￿and￿NXT:1970Ci￿systems)￿in￿2014￿compared￿to￿2013.

Gross￿profit￿increased￿by￿EUR￿419.2￿million,￿or￿19.3￿percent,￿to￿EUR￿2,596.4￿million￿in￿2014￿from￿EUR￿2,177.2￿million￿in
2013.￿The￿increase￿in￿gross￿profit￿was￿mainly￿driven￿by:
• The￿full-year￿effect￿of￿Cymer￿in￿2014,￿whereas￿2013￿only￿includes￿Cymer￿for￿seven￿months;
• Holistic￿Lithography￿increased￿through￿the￿sales￿of￿integrated￿metrology￿and￿feedback￿loop￿technology;￿and
• 2014￿Includes￿lower￿one-off￿purchase￿price￿accounting￿adjustments￿related￿to￿Cymer.

Gross￿profit￿as￿a￿percentage￿of￿net￿sales￿increased￿from￿41.5￿percent￿in￿2013￿to￿44.3￿percent￿in￿2014,￿for￿the￿same
reasons￿as￿gross￿profit￿increased,￿partly￿offset￿by￿higher￿EUV￿sales￿(which￿currently￿do￿not￿contribute￿to￿gross￿profit).

Other Income
Other￿income￿consists￿of￿contributions￿for￿R&D￿programs￿under￿the￿NRE￿funding￿arrangements￿from￿certain
Participating￿Customers￿in￿the￿CCIP￿and￿amounted￿to￿EUR￿81.0￿million￿for￿2014￿(2013:￿EUR￿64.4￿million).

Research and Development Costs 
R&D￿costs￿(net￿of￿credits￿and￿excluding￿contributions￿under￿the￿NRE￿Funding￿Agreements￿from￿certain￿Participating
Customers￿in￿the￿CCIP)￿increased￿by￿EUR￿192.1￿million,￿or￿21.8￿percent,￿to￿EUR￿1,074.1￿million￿in￿2014￿from￿EUR￿882.0
million￿in￿2013.￿R&D￿costs￿increased￿mainly￿due￿to￿the￿acceleration￿of￿certain￿R&D￿programs,￿primarily￿EUV￿and￿next-
generation￿immersion.

Selling, General and Administrative Costs
SG&A￿costs￿increased￿by￿EUR￿9.4￿million,￿or￿3.0￿percent,￿to￿EUR￿321.1￿million￿in￿2014,￿from￿EUR￿311.7￿million￿in￿2013.
This￿increase￿was￿mainly￿driven￿by￿the￿full-year￿effect￿of￿Cymer￿in￿2014,￿whereas￿2013￿only￿includes￿Cymer￿for￿seven
months.

Interest and Other, Net
Interest￿and￿other,￿net￿decreased￿by￿EUR￿15.8￿million￿in￿2014￿compared￿to￿2013.￿In￿2013￿interest￿and￿other,￿net￿included
a￿loss￿on￿the￿partial￿extinguishment￿of￿our￿EUR￿600￿million￿5.75￿percent￿senior￿notes￿due￿2017.

ASML￿ANNUAL￿REPORT￿2014

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Income Taxes
The￿effective￿tax￿rate￿increased￿to￿6.0￿percent￿of￿income￿before￿income￿taxes￿in￿2014￿compared￿to￿0.8￿percent￿in￿2013.
In￿2014￿the￿tax￿rate￿was￿favorably￿impacted￿by￿settling￿agreements￿entered￿into￿by￿ASML￿Netherlands￿B.V.￿and￿Cymer
LLC.,￿prior￿to￿our￿acquisition￿of￿Cymer￿in￿2013,￿at￿different￿tax￿rates.￿In￿2013,￿we￿recognized￿a￿gain￿as￿a￿result￿of￿the
accounting￿for￿business￿combinations￿Cymer.￿This￿gain￿is￿not￿recognized￿for￿tax￿purposes￿and￿was,￿apart￿from￿the￿R&D
tax￿incentives,￿the￿major￿driver￿for￿the￿change￿in￿the￿effective￿tax￿rate￿in￿2013.

Net Income
Net￿income￿in￿2014￿amounted￿to￿EUR￿1,196.6￿million,￿or￿20.4￿percent￿of￿net￿sales,￿representing￿EUR￿2.74￿basic￿net
income￿per￿ordinary￿share,￿compared￿with￿net￿income￿in￿2013￿of￿EUR￿1,015.5￿million,￿or￿19.4￿percent￿of￿net￿sales,
representing￿EUR￿2.36￿basic￿net￿income￿per￿ordinary￿share.

Results￿of￿Operations￿2013￿Compared￿to￿2012
Set￿out￿below￿our￿Consolidated￿Statements￿of￿Operations￿data￿for￿the￿years￿ended￿December￿31,￿2013￿and￿2012:

Year ended December 31
(in millions)

Total￿net￿sales
Cost￿of￿sales
Gross￿profit
Other￿income
Research￿and￿development￿costs
Selling,￿general￿and￿administrative￿costs
Income￿from￿operations
Interest￿and￿other,￿net
Income￿before￿income￿taxes
Provision￿for￿income￿taxes
Net￿income

2013
EUR

5,245.3
(3,068.1)
2,177.2
64.4
(882.0)
(311.7)
1,047.9
(24.4)
1,023.5
(8.0)
1,015.5

2012
EUR

4,731.5
(2,726.3)
2,005.2
-
(589.1)
(259.3)
1,156.8
(6.2)
1,150.6
(4.3)
1,146.3

Set￿out￿below￿are￿our￿Consolidated￿Statements￿of￿Operations￿data￿for￿the￿years￿ended￿December￿31,￿2013￿and￿2012
expressed￿as￿a￿percentage￿of￿our￿total￿net￿sales:

Year ended December 31

Total￿net￿sales
Cost￿of￿sales
Gross￿profit
Other￿income
Research￿and￿development￿costs
Selling,￿general￿and￿administrative￿costs
Income￿from￿operations
Interest￿and￿other,￿net
Income￿before￿income￿taxes
Provision￿for￿income￿taxes
Net￿income

2013
%

100.0
(58.5)
41.5
1.2
(16.8)
(5.9)
20.0
(0.5)
19.5
(0.1)
19.4

2012
%

100.0
(57.6)
42.4
-
(12.5)
(5.5)
24.4
(0.1)
24.3
(0.1)
24.2

ASML￿ANNUAL￿REPORT￿2014

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Net Sales and Gross Profit
The￿following￿table￿shows￿a￿summary￿of￿net￿sales,￿units￿sold,￿gross￿profit￿and￿ASP￿data￿for￿the￿years￿ended￿December
31,￿2013￿and￿2012:

Year ended December 31
(in millions EUR, unless otherwise indicated)
Net￿sales
Net￿system￿sales
Net￿service￿and￿field￿option￿sales
Total￿sales￿of￿systems￿(in￿units)
Total￿sales￿of￿new￿systems￿(in￿units)
Total￿sales￿of￿used￿systems￿(in￿units)
Gross￿profit￿as￿a￿percentage￿of￿net￿sales
ASP￿of￿system￿sales
ASP￿of￿new￿system￿sales
ASP￿of￿used￿system￿sales

2013

2012

5,245.3
3,993.1
1,252.2
157
142
15
41.5
25.4
27.4
6.9

4,731.5
3,801.6
929.9
170
146
24
42.4
22.4
24.8
7.6

Net￿sales￿increased￿by￿EUR￿513.8￿million,￿or￿10.9￿percent,￿to￿EUR￿5,245.3￿million￿in￿2013￿from￿EUR￿4,731.5￿million￿in
2012,￿mainly￿driven￿by￿the￿increase￿in￿net￿service￿and￿field￿option￿sales￿of￿EUR￿322.3￿million,￿or￿34.7￿percent￿to￿EUR
1,252.2￿million￿in￿2013￿from￿EUR￿929.9￿million￿in￿2012.￿The￿increase￿in￿net￿service￿and￿field￿option￿sales￿was￿mainly
caused￿by￿the￿expansion￿of￿Holistic￿Lithography￿through￿increased￿sales￿of￿integrated￿metrology￿and￿feedback￿loop
technology￿and￿by￿OnPulse￿revenues￿as￿a￿result￿of￿the￿acquisition￿of￿Cymer.

The￿increase￿in￿net￿system￿sales￿of￿EUR￿191.5￿million,￿or￿5.0￿percent,￿to￿EUR￿3,993.1￿million￿in￿2013￿from￿EUR￿3,801.6
million￿in￿2012￿was￿mainly￿caused￿by￿an￿increased￿ASP￿which￿more￿than￿offset￿the￿lower￿amount￿of￿systems￿sold.

The￿increase￿of￿the￿ASP￿of￿our￿systems￿sold￿was￿mainly￿explained￿by￿the￿ASP￿of￿our￿new￿systems￿sold￿which￿increased
to￿EUR￿27.4￿million￿in￿2013￿from￿EUR￿24.8￿million￿in￿2012,￿which￿was￿the￿result￿of￿a￿shift￿in￿the￿mix￿of￿systems￿sold
towards￿more￿high-end￿system￿types,￿NXT:1960Bi￿and￿NXT:1970Ci￿and￿including￿one￿NXE:3300B.

Through￿2013,￿all￿of￿the￿top￿10￿chipmakers￿worldwide,￿in￿terms￿of￿semiconductor￿capital￿expenditure,￿were￿our
customers.￿In￿2013,￿recognized￿sales￿to￿our￿largest￿customer￿accounted￿for￿EUR￿2,058.6￿million,￿or￿39.2￿percent￿of￿our
net￿sales.￿In￿2012,￿recognized￿sales￿to￿our￿largest￿customer￿accounted￿for￿EUR￿1,236.1￿million,￿or￿26.1￿percent￿of￿our
net￿sales.

Gross￿profit￿increased￿by￿EUR￿172.0￿million￿to￿EUR￿2,177.2￿million￿or￿41.5￿percent￿of￿net￿sales￿in￿2013￿from￿EUR
2,005.2￿million￿or￿42.4￿percent￿of￿net￿sales￿in￿2012.￿Higher￿gross￿profit￿was￿mainly￿driven￿by￿the￿increased￿net￿system
sales.￿Gross￿profit￿as￿a￿percentage￿of￿net￿sales￿in￿2013￿decreased￿compared￿to￿2012,￿mainly￿due￿to￿a￿1.6￿percent
impact￿from￿non-cash￿purchase￿price￿accounting￿adjustments￿related￿to￿the￿Cymer￿acquisition.

Other Income
Other￿income￿consisted￿of￿contributions￿for￿R&D￿programs￿under￿the￿NRE￿funding￿arrangements￿from￿Participating
Customers￿in￿the￿CCIP￿and￿amounted￿to￿EUR￿64.4￿million￿for￿2013￿(2012:￿nil).

Research and Development Costs
R&D￿costs￿(net￿of￿credits￿and￿excluding￿contributions￿under￿the￿NRE￿funding￿agreements￿from￿Participating￿Customers
in￿the￿CCIP)￿increased￿by￿EUR￿292.9￿million,￿or￿49.7￿percent,￿to￿EUR￿882.0￿million￿in￿2013￿from￿EUR￿589.1￿million￿in
2012.￿R&D￿spending￿mainly￿increased￿due￿the￿additional￿investments￿in￿EUV￿source￿development￿as￿a￿result￿of￿the
acquisition￿of￿Cymer￿and￿further￿investments￿in￿our￿other￿strategic￿programs￿(Immersion￿and￿holistic￿lithography).

Selling, General and Administrative Costs
SG&A￿costs￿increased￿by￿EUR￿52.4￿million,￿or￿20.2￿percent,￿to￿EUR￿311.7￿million￿in￿2013,￿from￿EUR￿259.3￿million￿in
2012.￿The￿increase￿was￿mainly￿driven￿by￿the￿acquisition￿and￿subsequent￿integration￿of￿Cymer￿and￿incurred￿restructuring
expenses.

Interest and Other, Net
Interest￿and￿other,￿net￿increased￿by￿EUR￿18.2￿million￿to￿EUR￿24.4￿million￿expense￿in￿2013￿from￿EUR￿6.2￿million
expense￿in￿2012.￿This￿increase￿was￿mainly￿explained￿by￿the￿loss￿on￿the￿partial￿extinguishment￿of￿our￿EUR￿600￿million
5.75￿percent￿senior￿notes￿due￿2017￿and￿a￿lower￿yield￿generated￿on￿our￿cash￿and￿cash￿equivalents￿and￿short-term
investments.

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Income Taxes
The￿effective￿tax￿rate￿increased￿to￿0.8￿percent￿of￿income￿before￿income￿taxes￿in￿2013￿compared￿to￿0.4￿percent￿in￿2012.
In￿2013,￿the￿effective￿tax￿rate￿was￿impacted￿by￿the￿settlement￿of￿the￿favorable￿pre-existing￿relationships￿between￿Cymer
and￿ASML.￿This￿settlement￿gain￿was￿not￿recognized￿for￿tax￿purposes￿and￿was,￿apart￿from￿the￿R&D￿tax￿incentives,
the￿major￿driver￿for￿the￿change￿in￿the￿effective￿tax￿rate￿in￿2013.￿In￿2012,￿the￿effective￿tax￿rate￿was￿amongst￿others
impacted￿by￿a￿one-time￿tax￿benefit￿resulting￿from￿successful￿conclusion￿of￿tax￿audits.￿The￿movement￿in￿the￿liability￿for
unrecognized￿tax￿benefits￿in￿2013￿was￿considered￿to￿be￿limited￿compared￿to￿2012.

Net Income
Net￿income￿in￿2013￿amounted￿to￿EUR￿1,015.5￿million,￿or￿19.4￿percent￿of￿net￿sales,￿representing￿EUR￿2.36￿basic￿net
income￿per￿ordinary￿share,￿compared￿with￿net￿income￿in￿2012￿of￿EUR￿1,146.3￿million,￿or￿24.2￿percent￿of￿net￿sales,
representing￿EUR￿2.70￿basic￿net￿income￿per￿ordinary￿share.

Foreign￿Exchange￿Management
See￿Item￿3.D.￿"Risk￿Factors￿-￿Fluctuations￿in￿Foreign￿Exchange￿Rates￿Could￿Harm￿Our￿Results￿of￿Operations",￿Item￿11
"Quantitative￿and￿Qualitative￿Disclosures￿About￿Market￿Risk",￿Note￿1￿and￿Note￿4￿to￿our￿Financial￿Statements.

B. Liquidity and Capital Resources
Our￿cash￿and￿cash￿equivalents￿increased￿to￿EUR￿2,419.5￿million￿as￿of￿December￿31,￿2014￿from￿EUR￿2,330.7￿million￿as
of￿December￿31,￿2013￿and￿our￿short-term￿investments￿decreased￿to￿EUR￿334.9￿million￿as￿of￿December￿31,￿2014￿from
EUR￿679.9￿million￿as￿of￿December￿31,￿2013.

We￿generated￿net￿cash￿from￿operating￿activities￿of￿EUR￿1,025.2￿million,￿EUR￿1,054.2￿million￿and￿EUR￿703.5￿million￿in
2014,￿2013￿and￿2012,￿respectively.￿Lower￿net￿cash￿provided￿by￿operating￿activities￿in￿2014￿compared￿to￿2013￿relates
to￿increased￿working￿capital,￿which￿is￿mainly￿due￿to￿a￿decrease￿in￿accounts￿payable.￿Higher￿net￿cash￿provided￿by
operating￿activities￿in￿2013￿compared￿to￿2012￿related￿to￿increased￿sales￿levels￿and￿decreased￿our￿working￿capital,
mainly￿due￿to￿an￿increase￿in￿accounts￿payable.

We￿used￿EUR￿16.2￿million￿for￿investing￿activities￿in￿2014,￿EUR￿368.4￿million￿in￿2013￿and￿EUR￿1,119.8￿million￿in￿2012.
In￿2014,￿our￿investing￿activities￿mainly￿related￿to￿the￿purchase￿of￿property,￿plant￿and￿equipment￿of￿EUR￿358.3￿million,
mainly￿for￿the￿construction￿of￿our￿EUV￿production￿facilities￿in￿Veldhoven,￿the￿Netherlands.￿This￿was￿offset￿by￿the
decrease￿of￿short-term￿investments,￿mainly￿in￿Dutch￿Treasury￿Certificates￿and￿deposits￿with￿the￿Dutch￿government,
of￿EUR￿345.0￿million.￿In￿2013,￿our￿investing￿activities￿mainly￿related￿to￿the￿cash￿consideration￿paid￿for￿the￿acquisition
of￿Cymer￿of￿EUR￿443.7￿million￿and￿the￿purchase￿of￿property,￿plant￿and￿equipment￿of￿EUR￿210.8￿million,￿mainly￿related
to￿further￿expansion￿of￿our￿EUV￿production￿facilities.￿This￿was￿to￿a￿large￿extent￿offset￿by￿the￿decrease￿of￿short-term
investments,￿mainly￿in￿Dutch￿Treasury￿Certificates￿and￿deposits￿with￿the￿Dutch￿government,￿of￿EUR￿290.2￿million.￿In
2012,￿our￿investing￿activities￿primarily￿related￿to￿our￿short-term￿investments￿in￿Dutch￿Treasury￿Certificates￿and￿deposits
with￿the￿Dutch￿government￿of￿EUR￿930.0￿million￿and￿purchases￿of￿property,￿plant￿and￿equipment￿of￿EUR￿171.9￿million.

Net￿cash￿used￿in￿financing￿activities￿was￿EUR￿928.4￿million￿in￿2014,￿EUR￿113.1￿million￿in￿2013,￿and￿EUR￿545.6￿million
in￿2012.￿In￿2014,￿net￿cash￿used￿in￿financing￿activities￿included￿a￿cash￿outflow￿of￿EUR￿700.0￿million￿for￿our￿regular
share￿buyback￿program￿and￿our￿annual￿dividend￿payment￿of￿EUR￿268.0￿million,￿slightly￿offset￿by￿EUR￿39.7￿million￿net
proceeds￿from￿issuance￿of￿shares￿in￿connection￿with￿the￿exercise￿and￿purchase￿of￿employee￿stock￿and￿stock￿options.
In￿2013,￿net￿cash￿used￿in￿financing￿activities￿included￿the￿net￿cash￿proceeds￿of￿EUR￿740.4￿million￿from￿our￿notes
offering￿and￿net￿cash￿proceeds￿of￿EUR￿31.8￿million￿from￿the￿issuance￿of￿shares￿in￿connection￿with￿the￿exercise￿and
purchase￿of￿employee￿stock￿options,￿mainly￿offset￿by￿net￿cash￿outflows￿of￿EUR￿368.3￿million￿for￿our￿notes￿tender￿offer
and￿unwinding￿of￿related￿interest￿rate￿swaps,￿EUR￿300.0￿million￿for￿our￿regular￿share￿buyback￿program￿and￿EUR￿216.1
million￿for￿our￿annual￿dividend￿payment.￿In￿2012,￿net￿cash￿used￿in￿financing￿activities￿included￿the￿net￿cash￿outflow￿of
EUR￿3,728.3￿million￿for￿the￿synthetic￿share￿buyback,￿EUR￿535.4￿million￿for￿our￿regular￿share￿buyback￿programs￿and
EUR￿188.9￿million￿for￿our￿annual￿dividend￿payment,￿to￿a￿large￿extent￿offset￿by￿the￿proceeds￿of￿EUR￿3,853.9￿million￿from
issuance￿of￿shares￿under￿the￿CCIP￿and￿EUR￿53.8￿million￿net￿proceeds￿from￿issuance￿of￿shares￿in￿connection￿with￿the
exercise￿and￿purchase￿of￿employee￿stock￿options.

Our￿principal￿sources￿of￿liquidity￿consist￿of￿cash￿flows￿from￿operations,￿cash￿and￿cash￿equivalents￿as￿of￿December￿31,
2014￿of￿EUR￿2,419.5￿million,￿short-term￿investments￿as￿of￿December￿31,￿2014￿of￿EUR￿334.9￿million￿and￿available￿credit
facilities￿as￿of￿December￿31,￿2014￿of￿EUR￿700.0￿million.￿In￿addition,￿we￿may￿from￿time￿to￿time￿raise￿additional￿capital￿in
debt￿and￿equity￿markets.￿Our￿goal￿is￿to￿remain￿an￿investment￿grade￿rated￿company￿and￿maintain￿a￿capital￿structure￿that
supports￿this.

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We￿invest￿our￿cash￿and￿cash￿equivalents￿and￿short-term￿investments￿in￿short-term￿deposits￿with￿financial￿institutions
that￿have￿good￿credit￿ratings￿and￿with￿the￿Dutch￿government,￿in￿Dutch￿Treasury￿Certificates￿and￿in￿AAAm-rated
money￿market￿funds￿that￿invest￿in￿high-rated￿short-term￿debt￿securities￿of￿financial￿institutions￿and￿governments.￿Our
investments￿are￿denominated￿in￿euros.

Our￿available￿credit￿facility￿consists￿of￿a￿EUR￿700.0￿million￿committed￿revolving￿credit￿facility￿from￿a￿group￿of￿banks￿that
will￿mature￿in￿2018.￿The￿credit￿facility￿contains￿a￿restrictive￿covenant￿that￿requires￿us￿to￿maintain￿a￿minimum￿committed
capital￿to￿net￿total￿assets￿ratio￿of￿40.0￿percent￿calculated￿in￿accordance￿with￿contractually￿agreed￿definitions.￿At￿the￿end
of￿2014,￿we￿were￿in￿compliance￿with￿the￿covenant.￿Outstanding￿amounts￿under￿this￿credit￿facility￿will￿bear￿interest￿at
EURIBOR￿or￿LIBOR￿plus￿a￿margin￿that￿depends￿on￿our￿liquidity￿position.￿No￿amounts￿were￿outstanding￿under￿the￿credit
facility￿as￿of￿December￿31,￿2014.

We￿have￿repayment￿obligations￿in￿2017,￿amounting￿to￿EUR￿238.2￿million￿and￿in￿2023,￿amounting￿to￿EUR￿750.0￿million,
both￿relating￿to￿our￿Eurobonds.

ASML￿seeks￿to￿ensure￿that￿cash￿generated￿from￿operations,￿together￿with￿the￿liquidity￿provided￿by￿existing￿cash
and￿cash￿equivalents￿and￿short-term￿investments￿and￿its￿borrowing￿capability,￿will￿be￿sufficient￿to￿satisfy￿its￿liquidity
requirements￿throughout￿every￿phase￿of￿the￿industry￿cycles.

Our￿liquidity￿needs￿are￿affected￿by￿many￿factors,￿some￿of￿which￿are￿based￿on￿the￿normal￿on-going￿operations￿of￿the
business,￿and￿others￿that￿relate￿to￿the￿uncertainties￿of￿the￿global￿economy￿and￿the￿semiconductor￿industry.￿Although
our￿cash￿requirements￿fluctuate￿based￿on￿the￿timing￿and￿extent￿of￿these￿factors,￿we￿believe￿that￿cash￿generated￿from
operations,￿together￿with￿the￿liquidity￿provided￿by￿existing￿cash￿and￿cash￿equivalents￿and￿short-term￿investments￿and
our￿borrowing￿capability￿are￿sufficient￿to￿satisfy￿our￿current￿requirements,￿including￿our￿expected￿capital￿expenditures￿in
2015.￿We￿intend￿to￿return￿cash￿to￿our￿shareholders￿on￿a￿regular￿basis￿in￿the￿form￿of￿dividend￿payments￿and,￿subject￿to
our￿actual￿and￿anticipated￿liquidity￿requirements￿and￿other￿relevant￿factors,￿share￿buybacks￿or￿capital￿repayment.

See￿Notes￿4,￿5,￿15,￿16,￿26￿and￿27￿to￿our￿Financial￿Statements.

C. Research and Development, Patents and Licenses, etc.

Research￿and￿Development
See￿Item￿4.B.￿"Business￿Overview￿-￿Research￿and￿Development"￿and￿Item￿5.A.￿"Operating￿Results￿-￿Results￿of
Operations".

Intellectual￿Property￿Matters
See￿Item￿3.D.￿"Risk￿Factors￿-￿Failure￿to￿Adequately￿Protect￿the￿Intellectual￿Property￿Rights￿Upon￿Which￿We￿depend
Could￿Harm￿Our￿Business"￿and￿"Risk￿Factors￿-￿Defending￿Against￿Intellectual￿Property￿Claims￿by￿Others￿Could￿Harm
Our￿Business"￿and￿Item￿4.B.￿"Business￿Overview￿-￿Intellectual￿Property".

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D. Trend Information
In￿EUV,￿we￿have￿made￿significant￿progress￿and￿we￿have￿met￿the￿500-wafer-per-day￿target￿that￿our￿customers￿set￿for
us￿in￿2014￿as￿we￿have￿now￿demonstrated￿these￿productivity￿levels￿at￿multiple￿customers￿over￿multiple￿days.￿We￿also
demonstrated￿source￿power￿at￿100￿Watts￿with￿96￿percent￿die￿yield,￿a￿key￿factor￿to￿get￿to￿the￿productivity￿levels￿that￿our
customers￿need￿for￿volume￿production.￿Our￿2015￿productivity￿target￿remains￿at￿1,000￿wafers￿per￿day￿and￿importantly￿for
our￿customers￿and￿for￿our￿EUV￿program,￿we￿received￿the￿first￿2￿orders￿for￿our￿fourth-generation￿NXE:3350B￿systems,
the￿first￿of￿which￿is￿planned￿for￿shipment￿mid-year￿2015.￿In￿addition,￿two￿NXE:3300B￿systems￿already￿delivered￿will￿be
upgraded￿to￿NXE:3350B￿performance.

Looking￿ahead￿to￿the￿first￿half￿of￿2015￿for￿DUV,￿we￿expect￿both￿our￿sales￿to￿the￿Memory￿segment￿and￿our￿service￿and
field￿option￿business￿to￿continue￿to￿be￿strong￿and￿sales￿to￿the￿logic￿segment￿to￿increase￿from￿the￿second￿half￿year￿of
2014￿to￿the￿first￿half￿year￿of￿2015.

The￿following￿table￿sets￿forth￿our￿systems￿backlog￿as￿of￿December￿31,￿2014￿and￿2013.

Year ended December 31
(in millions EUR, unless otherwise indicated)

2014 1

2013

New￿systems￿backlog￿(in￿units)
Used￿systems￿backlog￿(in￿units)
Total￿systems￿backlog￿(in￿units)
Value￿of￿new￿systems￿backlog
Value￿of￿used￿systems￿backlog
Total￿value￿of￿systems￿backlog
ASP￿of￿new￿systems￿backlog
ASP￿of￿used￿systems￿backlog
ASP￿of￿total￿systems￿backlog

64
18
82
2,687.0
85.4
2,772.4
42.0
4.7
33.8

46
10
56
1,906.2
47.1
1,953.3
41.4
4.7
34.9

1

Our￿systems￿backlog￿and￿net￿bookings￿include￿sales￿orders￿for￿which￿written￿authorizations￿have￿been￿accepted￿and￿shipment￿and/or￿revenue
recognition￿is￿expected￿within￿12￿months.￿As￿of￿2014￿we￿also￿include￿EUV￿in￿our￿backlog￿starting￿with￿our￿NXE:3350B￿systems.￿As￿a￿result,￿two
NXE:3350B￿systems￿are￿now￿included￿in￿our￿systems￿backlog￿and￿net￿bookings.￿Before￿2014,￿our￿systems￿backlog￿and￿net￿bookings￿include￿only
sales￿orders￿for￿which￿written￿authorizations￿have￿been￿accepted￿and￿system￿shipment￿and￿revenue￿recognition￿dates￿within￿the￿following￿12￿months
have￿been￿assigned.￿This￿change￿has￿no￿impact￿on￿the￿comparative￿figures.

Historically,￿orders￿have￿been￿subject￿to￿cancellation￿or￿delay￿by￿the￿customer.￿Due￿to￿possible￿customer￿changes￿in
delivery￿schedules￿and￿to￿cancellation￿of￿orders,￿our￿systems￿backlog￿at￿any￿particular￿date￿is￿not￿necessarily￿indicative
of￿actual￿sales￿for￿any￿succeeding￿period.

For￿the￿first￿quarter￿of￿2015,￿we￿expect￿net￿sales￿of￿around￿EUR￿1.6￿billion,￿a￿gross￿margin￿of￿around￿47￿percent,￿R&D
costs￿of￿about￿EUR￿260￿million,￿other￿income￿of￿about￿EUR￿20￿million,￿which￿consists￿of￿contributions￿from￿participants
of￿the￿CCIP￿and￿SG&A￿costs￿of￿about￿EUR￿83￿million.

On￿January￿21,￿2015￿we￿announced￿a￿new￿share￿buyback￿program,￿to￿be￿executed￿within￿the￿2015-2016￿timeframe.
As￿part￿of￿this￿program,￿we￿intend￿to￿purchase￿up￿to￿EUR￿750￿million￿of￿shares￿which￿we￿intend￿to￿cancel￿upon
repurchase.￿In￿addition,￿we￿intend￿to￿purchase￿as￿part￿of￿this￿program￿up￿to￿3.3￿million￿shares￿to￿cover￿employee￿stock
and￿stock￿option￿plans.￿This￿buyback￿program￿will￿start￿on￿January￿22,￿2015,￿and￿at￿current￿share￿price￿these￿intended
repurchases￿represent￿a￿total￿value￿of￿approximately￿EUR￿1￿billion.

The￿trends￿discussed￿in￿this￿Item￿5.D.￿"Trend￿information"￿are￿subject￿to￿risks￿and￿uncertainties.￿See￿"Part￿I￿–￿Special
Note￿Regarding￿Forward￿Looking￿Statements"￿and￿item￿3.D.￿"Risk￿Factors".

E. Off-Balance Sheet Arrangements
We￿have￿various￿contractual￿obligations,￿some￿of￿which￿are￿required￿to￿be￿recognized￿as￿liabilities￿in￿our￿Financial
Statements,￿including￿long-￿and￿short-term￿debt.￿Other￿contractual￿obligations,￿namely￿operating￿lease￿commitments,
purchase￿obligations￿and￿guarantees,￿are￿generally￿not￿required￿to￿be￿recognized￿as￿liabilities￿on￿our￿balance￿sheet￿but
are￿required￿to￿be￿disclosed.

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32

F. Tabular Disclosure of Contractual Obligations
Our￿contractual￿obligations￿as￿of￿December￿31,￿2014￿can￿be￿summarized￿as￿follows:

Payments due by period
(in thousands)

Total
EUR

1 year
EUR

2 year
EUR

3 year
EUR

Long-Term￿Debt￿Obligations,￿including￿interest￿expense1 1,311,503
89,209

Operating￿Lease￿Obligations

44,958
29,280
Purchase￿Obligations 1,588,977 1,464,451
-

83,738

Unrecognized￿Tax￿Benefits,￿including￿interest￿expense

45,302
22,590
113,606
12,813

283,058
11,534
10,186
14,092

4 year
EUR

54,155
8,256
158
2,858

5 year
EUR

27,075
6,961
556
2,367

After
5 years
EUR

856,955
10,588
20
51,608

Total Contractual Obligations 3,073,427 1,538,689

194,311

318,870

65,427

36,959

919,171

1

See￿Note￿15￿to￿our￿Financial￿Statements￿for￿the￿amounts￿excluding￿interest￿expense.

Long-term￿debt￿obligations￿mainly￿relate￿to￿interest￿payments￿and￿principal￿amounts￿of￿our￿Eurobonds.￿See￿Note￿15￿to
our￿Financial￿Statements.

Operating￿lease￿obligations￿include￿leases￿of￿equipment￿and￿facilities.￿Lease￿payments￿recognized￿as￿an￿expense
were￿EUR￿43.9￿million,￿EUR￿42.0￿million￿and￿EUR￿41.6￿million￿for￿the￿years￿ended￿December￿31,￿2014,￿2013￿and￿2012,
respectively.

Several￿operating￿leases￿for￿our￿buildings￿contain￿purchase￿options,￿exercisable￿at￿the￿end￿of￿the￿lease,￿and￿in￿some
cases,￿during￿the￿term￿of￿the￿lease.￿The￿amounts￿to￿be￿paid￿if￿ASML￿should￿exercise￿these￿purchase￿options￿at￿the￿end
of￿the￿lease￿as￿of￿December￿31,￿2014￿can￿be￿summarized￿as￿follows:

Purchase options due by period
(in thousands)
Purchase￿options

Total
EUR
13,983

1 year
EUR
-

2 year
EUR
13,983

3 year
EUR
-

4 year
EUR
-

5 year
EUR
-

After 5
years
EUR
-

Purchase￿obligations￿include￿purchase￿commitments￿with￿suppliers￿in￿the￿ordinary￿course￿of￿business.￿ASML￿expects
that￿it￿will￿honor￿these￿purchase￿obligations￿to￿fulfill￿future￿sales,￿in￿line￿with￿the￿timing￿of￿those￿future￿sales.￿The￿general
terms￿and￿conditions￿of￿the￿agreements￿relating￿to￿the￿major￿part￿of￿our￿purchase￿commitments￿as￿of￿December￿31,
2014￿contain￿clauses￿that￿enable￿us￿to￿delay￿or￿cancel￿delivery￿of￿ordered￿goods￿and￿services￿up￿to￿the￿dates￿specified
in￿the￿corresponding￿purchase￿contracts.￿These￿terms￿and￿conditions￿that￿we￿typically￿agree￿with￿our￿supply￿chain
partners￿gives￿us￿additional￿flexibility￿to￿adapt￿our￿purchase￿obligations￿to￿our￿requirements￿in￿light￿of￿the￿inherent
cyclicality￿of￿the￿industry￿in￿which￿we￿operate.￿We￿establish￿a￿provision￿for￿cancellation￿costs￿when￿it￿is￿probable￿that
the￿liability￿has￿been￿incurred￿and￿the￿amount￿of￿cancellation￿fees￿is￿reasonably￿estimable.

G. Safe Harbor
See￿Part￿I￿"Special￿Note￿Regarding￿Forward-Looking￿Statements".

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Item 6 Directors, Senior Management and Employees

A. Directors and Senior Management
The￿members￿of￿our￿Supervisory￿Board￿and￿our￿BoM￿are￿as￿follows:

Name
Arthur￿P.M.￿van￿der￿Poel1,2,3
Fritz￿W.￿Fröhlich1,2,5
Pauline￿F.M.￿van￿der￿Meer￿Mohr1,4
Wolfgang￿H.￿Ziebart3,4
Clara￿(Carla)￿M.S.￿Smits-Nusteling1
Douglas￿A.￿Grose2,3
Johannes￿(Hans)￿M.C.￿Stork3
Peter￿T.F.M.￿Wennink

Martin￿A.￿van￿den￿Brink

Frits￿J.￿van￿Hout

Frédéric￿J.M.￿Schneider-Maunoury

Wolfgang￿U.￿Nickl

Title
Chairman￿of￿the￿Supervisory￿Board
Vice￿Chairman￿and￿Member￿of￿the￿Supervisory￿Board
Member￿of￿the￿Supervisory￿Board
Member￿of￿the￿Supervisory￿Board
Member￿of￿the￿Supervisory￿Board
Member￿of￿the￿Supervisory￿Board
Member￿of￿the￿Supervisory￿Board
President,￿Chief￿Executive￿Officer￿and￿member￿of￿the￿Board￿of
Management
President,￿Chief￿Technology￿Officer￿and￿member￿of￿the￿Board￿of
Management
Executive￿Vice￿President,￿Chief￿Program￿Officer￿and￿member￿of
the￿Board￿of￿Management
Executive￿Vice￿President,￿Chief￿Operations￿Officer￿and￿Member
of￿the￿Board￿of￿Management
Executive￿Vice￿President,￿Chief￿Financial￿Officer￿and￿Member￿of
the￿Board￿of￿Management

Year of Birth
1948
1942
1960
1950
1966
1950
1954
1957

Term Expires
2016
2015
2017
2017
2017
2017
2018
2018

1957

1960

1961

1969

2018

2017

2018

2018

1 Member￿of￿the￿Audit￿Committee.
2 Member￿of￿the￿Selection￿and￿Nomination￿Committee.
3 Member￿of￿the￿Technology￿and￿Strategy￿Committee.
4 Member￿of￿the￿Remuneration￿Committee
5 Mr.￿Fröhlich￿is￿to￿retire￿by￿rotation￿at￿the￿2015￿AGM.￿See￿below￿discussion￿of￿nominees￿for￿appointment￿to￿the￿Supervisory￿Board￿at￿the￿2015￿AGM.

Mr.￿Bilous￿retired￿from￿the￿Supervisory￿Board￿per￿the￿2014￿AGM.￿Mr.￿Fröhlich￿retired￿by￿rotation￿and￿was￿reappointed￿for
a￿period￿of￿one￿year￿in￿line￿with￿the￿Supervisory￿Board's￿rotation￿schedule.￿At￿the￿2014￿AGM￿Mr.￿Stork￿was￿appointed￿as
member￿of￿the￿Supervisory￿Board￿for￿a￿period￿of￿four￿years.

With￿great￿sadness,￿the￿Supervisory￿Board￿remembers￿the￿late￿Ms.￿Van￿den￿Burg,￿member￿of￿our￿Supervisory￿Board￿and
member￿of￿our￿Selection￿and￿Nomination￿Committee￿and￿Remuneration￿Committee,￿who￿passed￿away￿on￿September
28,￿2014.￿Over￿the￿past￿nine￿years,￿Ms.￿Van￿den￿Burg￿was￿an￿engaged￿and￿knowledgeable￿member￿of￿our￿Supervisory
Board.￿The￿Supervisory￿Board￿is￿grateful￿for￿the￿time￿she￿dedicated￿to￿ASML.

The￿Works￿Council￿has￿an￿enhanced￿right￿to￿make￿recommendations￿for￿nomination￿of￿one-third￿of￿the￿members￿of
the￿Supervisory￿Board,￿which￿recommendations￿may￿be￿rejected￿by￿the￿Supervisory￿Board￿in￿limited￿circumstances.
See￿Item￿6.C.￿"Board￿Practices￿-￿Supervisory￿Board".￿At￿the￿Annual￿General￿Meeting￿of￿Shareholders￿held￿in￿2009,
Ms.￿Van￿der￿Meer￿Mohr￿was￿appointed￿pursuant￿to￿this￿recommendation￿right,￿and￿at￿the￿2013￿AGM￿she￿was
reappointed￿in￿accordance￿with￿this￿recommendation￿right.￿At￿the￿2014￿AGM,￿Mr.￿Stork￿was￿appointed￿pursuant￿to
this￿recommendation￿right.￿The￿appointment￿of￿Ms.￿Van￿den￿Burg's￿successor￿at￿the￿2015￿AGM￿will￿be￿based￿on￿this
enhanced￿recommendation￿right.

The￿Supervisory￿Board￿spent￿considerable￿time￿discussing￿its￿future￿composition,￿in￿view￿of￿the￿rotation￿schedule
and￿envisaged￿changes￿in￿2015￿and￿subsequent￿years.￿For￿the￿fulfillment￿of￿vacancies￿several￿factors￿are￿taken￿into
consideration.￿The￿Supervisory￿Board￿profile￿includes￿the￿intention￿to￿have￿at￿least￿30￿percent￿representation￿of￿each
gender￿in￿ASML's￿Supervisory￿Board.￿This￿aspect￿has￿been￿taken￿into￿account￿in￿the￿process￿that￿has￿led￿to￿the
nomination￿of￿the￿following￿three￿new￿Supervisory￿Board￿members￿to￿the￿2015￿AGM:￿Ms.￿A.￿(Annet)￿Aris,￿Mr.￿G.J.
(Gerard)￿Kleisterlee￿and￿Mr.￿R.D.￿(Rolf-Dieter)￿Schwalb.￿The￿agenda￿and￿explanatory￿notes￿for￿the￿2015￿AGM￿will￿contain
further￿information￿in￿this￿respect.

The￿Supervisory￿Board￿reappointed￿Mr.￿Schneider-Maunoury￿for￿another￿period￿of￿four￿years￿upon￿notification￿to
the￿2014￿AGM.￿The￿indefinite￿appointment￿term￿of￿Mr.￿Wennink￿and￿Mr.￿Van￿den￿Brink￿was￿converted￿into￿a￿definite
appointment￿term￿of￿four￿years￿per￿the￿2014￿AGM.￿Mr.￿Nickl￿was￿appointed￿as￿member￿of￿the￿BoM￿upon￿notification￿to
the￿2014￿AGM.

There￿are￿no￿family￿relationships￿among￿the￿members￿of￿our￿Supervisory￿Board￿and￿our￿BoM.

ASML￿ANNUAL￿REPORT￿2014

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Director and Officer Biographies

Arthur P.M. van der Poel
Mr.￿Van￿der￿Poel￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿March￿2004￿and￿was￿appointed￿as￿Chairman￿in￿March￿2007.
Mr.￿Van￿der￿Poel￿was￿CEO￿of￿Philips￿Semiconductors,￿a￿member￿of￿the￿Board￿of￿Management￿and￿a￿member￿of￿the
Group￿Management￿Committee￿of￿Royal￿Philips￿Electronics￿N.V.￿Currently,￿Mr.￿Van￿der￿Poel￿is￿a￿member￿of￿the￿Board￿of
Directors￿of￿Gemalto￿Holding￿N.V.￿and￿the￿Chairman￿of￿the￿Supervisory￿Board￿of￿BDR￿Thermea.￿Mr.￿Van￿der￿Poel￿was￿a
member￿of￿the￿Supervisory￿Board￿of￿Royal￿HaskoningDHV￿B.V.￿until￿April￿1,￿2014.

Fritz W. Fröhlich
Mr.￿Fröhlich￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿March￿2004.￿Mr.￿Fröhlich￿was￿Deputy￿Chairman￿and￿CFO￿of
Akzo￿Nobel￿N.V.￿Currently,￿Mr.￿Fröhlich￿is￿the￿Chairman￿of￿the￿Supervisory￿Board￿of￿Randstad￿Holding￿N.V.,￿a￿member
of￿the￿Supervisory￿Boards￿of￿Allianz￿Nederland￿N.V.￿and￿Rexel￿S.A.￿and￿a￿member￿of￿the￿Board￿of￿Directors￿of￿Prysmian
Group.

Pauline F.M. van der Meer Mohr
Ms.￿Van￿der￿Meer￿Mohr￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿March￿2009.￿Ms.￿Van￿der￿Meer￿Mohr￿was￿managing
partner￿of￿the￿Amstelbridge￿Group,￿Senior￿Executive￿Vice￿President￿at￿ABN￿AMRO￿Bank,￿Head￿of￿Group￿Human
Resources￿at￿TNT￿N.V.,￿and￿has￿held￿several￿senior￿executive￿roles￿at￿the￿Royal/Dutch￿Shell￿group￿of￿companies￿in
various￿areas.￿Currently,￿Ms.￿Van￿der￿Meer￿Mohr￿serves￿as￿President￿of￿the￿Executive￿Board￿of￿the￿Erasmus￿University
Rotterdam,￿the￿Netherlands.￿Ms.￿Van￿der￿Meer￿Mohr￿is￿also￿a￿member￿of￿the￿Supervisory￿Board￿of￿Royal￿DSM￿N.V.,￿the
Chairperson￿of￿the￿Executive￿Board￿of￿the￿Fulbright￿Center￿and￿a￿member￿of￿the￿Board￿Concertgebouw￿Fonds.￿Ms.￿Van
der￿Meer￿Mohr￿was￿the￿Chairperson￿of￿the￿Supervisory￿Board￿of￿Rotterdam￿School￿of￿Management￿until￿December￿1,
2014.

Wolfgang H. Ziebart
Mr.￿Ziebart￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿March￿2009.￿Mr.￿Ziebart￿was￿President￿and￿CEO￿of￿Infineon
Technologies￿A.G.￿Prior￿to￿that,￿Mr.￿Ziebart￿was￿on￿the￿Boards￿of￿Management￿of￿car￿components￿manufacturer
Continental￿A.G.￿and￿automobile￿producer￿BMW￿A.G.￿Currently,￿Mr.￿Ziebart￿is￿the￿Group￿Engineering￿Director￿of￿Jaguar
Land￿Rover￿Ltd.￿and￿is￿the￿Chairman￿of￿the￿Supervisory￿Board￿of￿Nordex￿S.E.

Clara (Carla) M.S. Smits-Nusteling
Ms.￿Smits-Nusteling￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿April￿2013.￿Ms.￿Smits-Nusteling￿was￿CFO￿and￿a￿member
of￿the￿Board￿of￿Management￿of￿Royal￿KPN￿N.V.￿Ms.￿Smits-Nusteling￿also￿held￿several￿finance￿and￿business￿related
positions￿at￿Royal￿KPN￿N.V.￿and￿PostNL.￿Currently,￿Ms.￿Smits-Nusteling￿is￿a￿non-executive￿director￿of￿the￿Board￿of￿Tele2
AB.

Douglas A. Grose
Mr.￿Grose￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿April￿2013.￿Mr.￿Grose￿was￿CEO￿of￿GlobalFoundries.￿Mr.￿Grose￿also
served￿as￿senior￿vice￿president￿of￿technology￿development,￿manufacturing￿and￿supply￿chain￿for￿AMD.￿Prior￿to￿that,￿Mr.
Grose￿spent￿25￿years￿at￿IBM￿as￿General￿Manager￿of￿technology￿development￿and￿manufacturing￿for￿the￿systems￿and
technology￿group.￿Currently,￿Mr.￿Grose￿is￿a￿member￿of￿the￿Board￿of￿Directors￿of￿SBA￿Materials.

Johannes (Hans) M.C. Stork
Mr.￿Stork￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿April￿2014.￿Mr.￿Stork￿held￿various￿management￿positions￿at￿IBM
Corporation,￿Hewlett￿Packard￿Company,￿Texas￿Instruments,￿Inc.￿and￿Applied￿Materials,￿Inc.,￿including￿Senior￿Vice
President￿and￿CTO￿of￿Texas￿Instruments,￿Inc.￿and￿Group￿Vice￿President￿and￿CTO￿of￿Applied￿Materials,￿Inc.￿Further,￿Mr.
Stork￿was￿a￿member￿of￿the￿Board￿of￿Sematech.￿Currently,￿Mr.￿Stork￿serves￿as￿Senior￿Vice￿President￿and￿CTO￿of￿ON
Semiconductor￿Corporation￿and￿is￿also￿a￿member￿of￿the￿Scientific￿Advisory￿Board￿of￿imec.

Peter T.F.M. Wennink
Mr.￿Wennink￿joined￿ASML￿on￿January￿1,￿1999￿and￿was￿appointed￿as￿Executive￿Vice￿President,￿CFO￿and￿member￿of￿our
BoM￿on￿July￿1,￿1999.￿Mr.￿Wennink￿was￿appointed￿as￿President￿and￿CEO￿on￿July￿1,￿2013.￿Mr.￿Wennink￿has￿an￿extensive
background￿in￿finance￿and￿accounting.￿Prior￿to￿his￿employment￿with￿ASML,￿Mr.￿Wennink￿worked￿as￿a￿partner￿at￿Deloitte
Accountants,￿specializing￿in￿the￿high￿technology￿industry￿with￿an￿emphasis￿on￿the￿semiconductor￿equipment￿industry.
Mr.￿Wennink￿is￿a￿member￿of￿the￿Dutch￿Institute￿of￿Registered￿Accountants,￿a￿member￿of￿the￿Supervisory￿Board￿of￿Bank
Insinger￿de￿Beaufort￿N.V.￿and￿a￿member￿of￿the￿Advisory￿Board￿of￿the￿Investment￿Committee￿of￿Stichting￿Pensioenfonds
ABP￿(Dutch￿pension￿fund￿for￿government￿employees).￿Mr.￿Wennink￿further￿serves￿on￿the￿board￿of￿the￿FME-CWM￿(the
employers’￿organization￿for￿the￿technology￿industry￿in￿the￿Netherlands).

ASML￿ANNUAL￿REPORT￿2014

35

Martin A. van den Brink
Mr.￿Van￿den￿Brink￿joined￿ASML￿when￿the￿company￿was￿founded￿in￿1984.￿Mr.￿Van￿den￿Brink￿held￿several￿positions￿in
engineering￿and￿from￿1995￿he￿served￿as￿Vice￿President￿Technology.￿Mr.￿Van￿den￿Brink￿was￿appointed￿as￿Executive￿Vice
President￿Product￿&￿Technology￿and￿member￿of￿the￿BoM￿in￿1999.￿On￿July￿1,￿2013,￿Mr.￿Van￿den￿Brink￿was￿appointed
as￿President￿and￿CTO.￿Mr.￿Van￿den￿Brink￿earned￿a￿degree￿in￿Electrical￿Engineering￿from￿HTS￿Arnhem￿(HAN￿University),
and￿a￿degree￿in￿Physics￿(1984)￿from￿the￿University￿of￿Twente,￿the￿Netherlands.￿In￿2012,￿he￿was￿awarded￿an￿honorary
doctorate￿in￿physics￿by￿the￿UvA,￿the￿Netherlands.

Frits J. van Hout
Mr.￿Van￿Hout￿joined￿ASML￿in￿1984￿and￿rejoined￿ASML￿in￿2001,￿after￿a￿nine￿years￿absence.￿He￿was￿appointed￿as￿a
member￿of￿our￿BoM￿on￿March￿26,￿2009.￿Mr.￿Van￿Hout￿was￿appointed￿as￿Executive￿Vice￿President￿and￿CPO￿on￿July
1,￿2013.￿Prior￿to￿that,￿Mr.￿Van￿Hout￿served￿as￿Executive￿Vice￿President￿and￿CMO,￿Executive￿Vice￿President￿Integral
Efficiency,￿Senior￿Vice￿President￿Customer￿Support￿and￿held￿various￿other￿positions.￿From￿1992￿until￿2001,￿Mr.￿Van￿Hout
served￿as￿CEO￿of￿the￿Beyeler￿Group￿and￿held￿various￿management￿positions￿at￿Datacolor￿International.￿Mr.￿van￿Hout
earned￿a￿Master’s￿degree￿in￿Theoretical￿Physics￿(1981),￿University￿of￿Oxford;￿and￿a￿Master’s￿degree￿in￿Applied￿Physics
(1984),￿Eidgenössische￿Technische￿Hochschule,￿Zürich.

Frédéric J.M. Schneider-Maunoury
Mr.￿Schneider-Maunoury￿joined￿ASML￿on￿December￿1,￿2009,￿as￿Executive￿Vice￿President￿and￿COO￿and￿was￿appointed
to￿our￿BoM￿on￿March￿24,￿2010.￿Prior￿to￿joining￿ASML,￿Mr.￿Schneider-Maunoury￿served￿as￿Vice￿President￿Thermal
Products￿Manufacturing￿of￿the￿power￿generation￿and￿rail￿transport￿equipment￿group￿ALSTOM.￿Previously,￿Mr.
Schneider-Maunoury￿was￿general￿manager￿of￿the￿worldwide￿Hydro￿Business￿of￿ALSTOM.￿Further,￿Mr.￿Schneider-
Maunoury￿held￿various￿positions￿at￿the￿French￿Ministry￿of￿Trade￿and￿Industry.￿Mr.￿Schneider-Maunoury￿is￿a￿graduate￿of
Ecole￿Polytechnique￿(1985)￿and￿Ecole￿Nationale￿Supérieure￿des￿Mines￿(1988)￿in￿Paris.

Wolfgang U. Nickl
Mr.￿Nickl￿joined￿ASML￿on￿December￿1,￿2013,￿as￿Executive￿Vice￿President￿and￿CFO￿and￿was￿appointed￿as￿a￿member￿of
our￿BoM￿per￿the￿2014￿AGM.￿Prior￿to￿joining￿ASML,￿Mr.￿Nickl￿served￿as￿Executive￿Vice￿President￿and￿CFO￿at￿Western
Digital￿Corporation,￿a￿U.S.-headquartered,￿NASDAQ-listed￿developer￿and￿manufacturer￿of￿storage￿devices,￿where￿he
held￿several￿financial￿and￿operational￿leadership￿roles.￿Before￿Western￿Digital,￿Mr.￿Nickl￿gained￿experience￿in￿finance
and￿IT￿consulting.￿He￿earned￿a￿BA￿in￿Business￿from￿the￿University￿of￿Cooperative￿Education￿in￿Stuttgart,￿Germany,￿and
an￿MBA￿from￿the￿University￿of￿Southern￿California’s￿Marshall￿School￿of￿Business￿in￿Los￿Angeles,￿United￿States.

B. Compensation
The￿information￿required￿by￿Item￿6.B.￿is￿incorporated￿by￿reference￿from￿our￿2014￿Remuneration￿Report￿(pages￿14,15,16,
18￿and￿19)￿which￿is￿included￿as￿exhibit￿99.2￿on￿Form￿6-K￿furnished￿with￿the￿SEC￿on￿February￿11,￿2015.

C. Board Practices

General
We￿endorse￿the￿importance￿of￿good￿corporate￿governance,￿of￿which￿independent￿supervision,￿accountability￿and
transparency￿are￿the￿most￿significant￿elements.￿Within￿the￿framework￿of￿corporate￿governance,￿it￿is￿important￿that￿a
relationship￿of￿trust￿exists￿between￿the￿BoM,￿the￿Supervisory￿Board,￿our￿employees￿and￿our￿shareholders.

We￿pursue￿a￿policy￿of￿active￿communication￿with￿our￿shareholders.￿In￿addition￿to￿the￿exchange￿of￿ideas￿at￿the￿General
Meeting￿of￿Shareholders,￿other￿important￿forms￿of￿communication￿are￿the￿publication￿of￿our￿annual￿and￿quarterly
financial￿results￿as￿well￿as￿press￿releases￿and￿publications￿posted￿on￿our￿Website.

Our￿corporate￿governance￿structure￿is￿intended￿to:
• Provide￿shareholders￿with￿regular,￿reliable,￿relevant￿and￿transparent￿information￿regarding￿our￿activities,￿structure,

financial￿condition￿and￿results￿of￿operations,￿performance￿and￿other￿information,￿including￿information￿on￿our￿social,
ethical￿and￿environmental￿matters￿and￿policies;

• Apply￿high-quality￿standards￿for￿disclosure,￿accounting￿and￿auditing;￿and
• Apply￿stringent￿rules￿with￿regard￿to￿insider￿securities￿trading.

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Two-Tier Board Structure
ASML￿is￿incorporated￿under￿Dutch￿law￿and￿has￿a￿two-tier￿board￿structure.￿Responsibility￿for￿the￿management￿of￿ASML
lies￿with￿the￿BoM.￿Independent,￿non-executive￿members￿serve￿on￿the￿Supervisory￿Board,￿which￿supervises￿and￿advises
the￿members￿of￿the￿BoM￿in￿performing￿their￿management￿tasks.￿The￿BoM￿has￿the￿duty￿to￿keep￿the￿Supervisory￿Board
informed,￿consult￿with￿the￿Supervisory￿Board￿on￿important￿matters￿and￿submit￿certain￿important￿decisions￿to￿the
Supervisory￿Board￿for￿its￿approval.￿The￿Supervisory￿Board￿is￿responsible￿for￿supervising,￿monitoring￿and￿advising
the￿BoM￿on:￿(i)￿the￿achievement￿of￿our￿objectives,￿(ii)￿our￿strategy￿and￿management￿of￿risks￿inherent￿to￿our￿business
activities,￿(iii)￿the￿structure￿and￿operation￿of￿internal￿risk￿management￿and￿control￿systems,￿(iv)￿the￿financial￿reporting
process￿and￿(v)￿compliance￿with￿applicable￿legislation￿and￿regulations.

Supervisory￿Board￿members￿are￿prohibited￿from￿serving￿as￿officers￿or￿employees￿of￿ASML,￿and￿members￿of￿the￿BoM
cannot￿serve￿on￿the￿Supervisory￿Board.

Board of Management
The￿BoM￿consists￿of￿at￿least￿two￿members￿or￿such￿larger￿number￿of￿members￿as￿determined￿by￿the￿Supervisory￿Board.
Members￿of￿the￿BoM￿are￿appointed￿by￿the￿Supervisory￿Board.￿The￿Supervisory￿Board￿must￿notify￿the￿General￿Meeting
of￿Shareholders￿of￿the￿intended￿appointment￿of￿a￿member￿of￿the￿BoM.￿As￿a￿result￿of￿our￿compliance￿with￿the￿Dutch
Corporate￿Governance￿Code,￿members￿of￿the￿BoM￿shall￿be￿appointed￿for￿a￿maximum￿period￿of￿four￿years,￿but￿may
be￿re-appointed.￿Members￿of￿the￿BoM￿serve￿until￿the￿end￿of￿the￿term￿of￿their￿appointment,￿voluntary￿retirement,￿or
suspension￿or￿dismissal￿by￿the￿Supervisory￿Board.￿In￿the￿case￿of￿dismissal,￿the￿Supervisory￿Board￿must￿first￿inform￿the
General￿Meeting￿of￿Shareholders￿of￿the￿intended￿removal.

The￿Supervisory￿Board￿determines￿the￿remuneration￿of￿the￿individual￿members￿of￿the￿BoM,￿in￿line￿with￿the￿remuneration
policy￿adopted￿by￿the￿General￿Meeting￿of￿Shareholders,￿upon￿a￿proposal￿of￿the￿Supervisory￿Board.￿ASML’s
remuneration￿policy￿is￿included￿in￿the￿2014￿Remuneration￿Report.

For￿more￿details￿on￿the￿BoM,￿see￿Item￿6.A￿"Directors￿and￿Senior￿Management"￿and￿Item￿6.B."Compensation".

Supervisory Board
The￿Supervisory￿Board￿consists￿of￿at￿least￿three￿members￿or￿such￿larger￿number￿as￿determined￿by￿the￿Supervisory
Board.￿The￿Supervisory￿Board￿prepares￿a￿profile￿in￿relation￿to￿its￿size￿and￿composition;￿ASML's￿Supervisory￿Board
profile￿is￿posted￿on￿ASML’s￿Website.

Members￿of￿the￿Supervisory￿Board￿are￿appointed￿by￿the￿General￿Meeting￿of￿Shareholders￿from￿nominations￿of￿the
Supervisory￿Board.￿Nominations￿must￿be￿reasoned￿and￿must￿be￿made￿available￿to￿the￿General￿Meeting￿of￿Shareholders
and￿the￿Works￿Council￿simultaneously.￿Before￿the￿Supervisory￿Board￿presents￿its￿nominations,￿both￿the￿General￿Meeting
of￿Shareholders￿and￿the￿Works￿Council￿may￿make￿recommendations￿(which￿the￿Supervisory￿Board￿may￿reject).￿In
addition,￿the￿Works￿Council￿has￿an￿enhanced￿right￿to￿make￿recommendations￿for￿nomination￿of￿at￿least￿one-third￿of
the￿members￿of￿the￿Supervisory￿Board,￿which￿recommendation￿may￿only￿be￿rejected￿by￿the￿Supervisory￿Board:￿(i)
if￿the￿relevant￿person￿is￿unsuitable￿or￿(ii)￿if￿the￿Supervisory￿Board￿would￿not￿be￿duly￿composed￿if￿the￿recommended
person￿were￿appointed￿as￿a￿Supervisory￿Board￿member.￿If￿no￿agreement￿can￿be￿reached￿between￿the￿Supervisory￿Board
and￿the￿Works￿Council￿on￿these￿recommendations,￿the￿Supervisory￿Board￿may￿request￿the￿Enterprise￿Chamber￿of￿the
Amsterdam￿Court￿of￿Appeal￿to￿declare￿its￿objection￿legitimate.￿Any￿decision￿of￿the￿Enterprise￿Chamber￿on￿this￿matter￿is
non-appealable.

Nominations￿of￿the￿Supervisory￿Board￿may￿be￿rejected￿by￿the￿General￿Meeting￿of￿Shareholders￿by￿an￿absolute￿majority
of￿the￿votes￿representing￿at￿least￿one-third￿of￿the￿total￿outstanding￿capital.￿If￿the￿votes￿cast￿in￿favor￿of￿such￿resolution
do￿not￿represent￿at￿least￿one-third￿of￿the￿total￿outstanding￿capital,￿a￿new￿meeting￿can￿be￿convened￿at￿which￿the
nomination￿can￿be￿rejected￿by￿an￿absolute￿majority.￿If￿a￿nomination￿is￿rejected,￿the￿Supervisory￿Board￿must￿make￿a￿new
nomination.￿If￿a￿nomination￿is￿not￿rejected￿and￿the￿General￿Meeting￿of￿Shareholders￿does￿not￿appoint￿the￿nominated
person,￿the￿Supervisory￿Board￿will￿appoint￿the￿nominated￿person.

Members￿of￿the￿Supervisory￿Board￿serve￿for￿a￿maximum￿term￿of￿four￿years￿from￿the￿date￿of￿their￿appointment,￿or￿a
shorter￿period￿as￿set￿out￿in￿the￿rotation￿schedule￿as￿adopted￿by￿the￿Supervisory￿Board.￿They￿may￿be￿re-appointed,
provided￿that￿their￿entire￿term￿of￿office￿does￿not￿exceed￿twelve￿years.￿The￿General￿Meeting￿of￿Shareholders￿may,￿with
an￿absolute￿majority￿of￿the￿votes￿representing￿at￿least￿one-third￿of￿the￿total￿outstanding￿capital,￿dismiss￿the￿Supervisory
Board￿in￿its￿entirety￿for￿lack￿of￿confidence.￿In￿such￿event,￿the￿Enterprise￿Chamber￿of￿the￿Amsterdam￿Court￿of￿Appeal
shall￿appoint￿new￿members￿of￿the￿Supervisory￿Board￿at￿the￿request￿of￿the￿BoM.

Upon￿the￿proposal￿of￿the￿Supervisory￿Board,￿the￿General￿Meeting￿of￿Shareholders￿determines￿the￿remuneration￿of￿the
members￿of￿the￿Supervisory￿Board.￿A￿member￿of￿the￿Supervisory￿Board￿may￿not￿be￿granted￿any￿shares￿or￿option￿rights
by￿way￿of￿remuneration.

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For￿more￿details￿on￿the￿Supervisory￿Board,￿see￿Item￿6.A￿"Directors￿and￿Senior￿Management"￿and￿Item
6.B."Compensation".

Approval of Board of Management Decisions
The￿BoM￿requires￿prior￿approval￿of￿the￿General￿Meeting￿of￿Shareholders￿for￿resolutions￿concerning￿an￿important￿change
in￿the￿identity￿or￿character￿of￿ASML￿or￿its￿business,￿including:
• A￿transfer￿of￿all￿or￿substantially￿all￿of￿the￿business￿of￿ASML￿to￿a￿third￿party;
• Entering￿into￿or￿the￿termination￿of￿a￿long-term￿material￿joint￿venture￿between￿ASML￿and￿a￿third￿party;￿and
• An￿acquisition￿or￿divestment￿by￿ASML￿of￿an￿interest￿in￿the￿capital￿of￿a￿company￿with￿a￿value￿of￿at￿least￿one-third￿of

ASML’s￿assets￿(determined￿by￿reference￿to￿ASML’s￿most￿recently￿adopted￿Statutory￿Annual￿Report).

Rules of Procedure
The￿BoM￿and￿the￿Supervisory￿Board￿have￿adopted￿Rules￿of￿Procedure￿for￿each￿of￿the￿BoM,￿Supervisory￿Board￿and￿the
four￿Committees￿of￿the￿Supervisory￿Board.￿These￿Rules￿of￿Procedure￿are￿posted￿on￿our￿Website.

Directors and Officers Insurance and Indemnification
Members￿of￿the￿BoM￿and￿Supervisory￿Board,￿as￿well￿as￿certain￿senior￿management￿members,￿are￿insured￿under￿ASML’s
Directors￿and￿Officers￿Insurance￿Policy.￿Although￿the￿insurance￿policy￿provides￿for￿broad￿coverage,￿our￿directors￿and
officers￿may￿incur￿uninsured￿liabilities.￿ASML￿has￿agreed￿to￿indemnify￿its￿members￿of￿the￿BoM￿and￿Supervisory￿Board
against￿any￿claims￿arising￿in￿connection￿with￿their￿position￿within￿ASML,￿provided￿that￿such￿claim￿is￿not￿attributable￿to
willful￿misconduct￿or￿intentional￿recklessness.

Corporate Governance Developments
ASML￿continuously￿monitors￿and￿assesses￿applicable￿corporate￿governance￿rules,￿including￿recommendations￿and
initiatives￿regarding￿principles￿of￿corporate￿governance.￿These￿include￿rules￿that￿have￿been￿promulgated￿in￿the￿United
States￿both￿by￿NASDAQ￿and￿by￿the￿SEC.￿See￿also￿Item￿16.G.￿"Corporate￿Governance".

The￿Dutch￿Corporate￿Governance￿Code￿came￿into￿effect￿on￿January￿1,￿2004￿and￿was￿amended￿as￿of￿January￿1,￿2009.
Dutch￿listed￿companies￿are￿required￿to￿either￿comply￿with￿the￿principles￿and￿the￿best￿practice￿provisions￿of￿the￿Code,￿or
to￿explain￿on￿which￿points￿they￿deviate￿from￿these￿best￿practice￿provisions￿and￿why.

ASML￿reports￿on￿its￿compliance￿with￿the￿Dutch￿Corporate￿Governance￿Code￿in￿its￿2014￿Statutory￿Annual￿Report.

Committees of ASML's Supervisory Board
While￿retaining￿overall￿responsibility,￿the￿Supervisory￿Board￿assigns￿certain￿of￿its￿tasks￿to￿its￿four￿Committees:￿the￿Audit
Committee,￿the￿Remuneration￿Committee,￿the￿Selection￿and￿Nomination￿Committee￿and￿the￿Technology￿and￿Strategy
Committee.￿Members￿of￿these￿Committees￿are￿appointed￿from￿among￿the￿Supervisory￿Board￿members.

The￿Chairman￿of￿each￿Committee￿reports￿to￿the￿Supervisory￿Board￿the￿issues￿and￿items￿discussed￿in￿each￿meeting.
In￿addition,￿the￿minutes￿of￿each￿Committee￿are￿available￿to￿all￿members￿of￿the￿Supervisory￿Board,￿enabling￿the
Supervisory￿Board￿to￿make￿the￿appropriate￿decisions.

Audit Committee
The￿current￿members￿of￿our￿Audit￿Committee￿are￿Mr.￿Fröhlich￿(Chairman),￿Mr.￿Van￿der￿Poel,￿Ms.￿Smits-Nusteling
and￿Ms.￿Van￿der￿Meer￿Mohr,￿each￿of￿whom￿is￿an￿independent,￿non-executive￿member￿of￿our￿Supervisory￿Board￿in
accordance￿with￿the￿NASDAQ￿Listing￿Rules.￿The￿Supervisory￿Board￿has￿determined￿that￿Mr.￿Fröhlich￿qualifies￿as
the￿Audit￿Committee￿financial￿expert￿pursuant￿to￿Section￿407￿of￿the￿Sarbanes-Oxley￿Act￿and￿the￿rules￿promulgated
thereunder.￿Our￿external￿auditor,￿CEO,￿CFO,￿Corporate￿Controller,￿Corporate￿Chief￿Accountant,￿Senior￿Director
Corporate￿Risk￿and￿Assurance,￿as￿well￿as￿other￿ASML￿employees￿invited￿by￿the￿Chairman￿of￿the￿Audit￿Committee￿may
also￿attend￿the￿meetings￿of￿the￿Audit￿Committee.

The￿Audit￿Committee￿assists￿the￿Supervisory￿Board￿in:
• Overseeing￿the￿integrity￿of￿our￿Financial￿Statements￿and￿related￿financial￿and￿non-financial￿disclosures;
• Overseeing￿the￿qualifications,￿independence￿and￿performance￿of￿the￿external￿auditor;￿and
• Overseeing￿our￿disclosure￿controls￿and￿procedures￿(as￿defined￿in￿the￿Exchange￿Act￿Rules￿13a-15(e)￿and￿15d-15(e))

and￿internal￿control￿over￿financial￿reporting￿(as￿defined￿in￿Exchange￿Act￿Rules￿13a-15(f)￿and￿15d-15(f)).

In￿2014,￿the￿Audit￿Committee￿held￿eight￿scheduled￿meetings,￿either￿in￿person￿or￿via￿conference￿call.

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Remuneration Committee
The￿current￿members￿of￿our￿Remuneration￿Committee￿are￿Mr.￿Ziebart￿(Chairman)￿and￿Ms.￿Van￿der￿Meer￿Mohr,￿each
of￿whom￿is￿an￿independent,￿non-executive￿member￿of￿our￿Supervisory￿Board￿in￿accordance￿with￿the￿NASDAQ￿Listing
Rules.￿In￿2014,￿the￿Remuneration￿Committee￿held￿four￿scheduled￿meetings￿and￿several￿ad￿hoc￿meetings,￿either￿in
person￿or￿via￿conference￿call.

For￿details￿on￿the￿Remuneration￿Committee￿See￿Item￿6.B.￿''Compensation''.

Selection and Nomination Committee
The￿current￿members￿of￿our￿Selection￿and￿Nomination￿Committee￿are￿Mr.￿Van￿der￿Poel￿(Chairman),￿Mr.￿Grose￿and￿Mr.
Fröhlich,￿each￿of￿whom￿is￿an￿independent,￿non-executive￿member￿of￿our￿Supervisory￿Board￿in￿accordance￿with￿the
NASDAQ￿Listing￿Rules.

The￿Selection￿and￿Nomination￿Committee￿assists￿the￿Supervisory￿Board￿in:
• Preparing￿the￿selection￿criteria￿and￿appointment￿procedures￿for￿members￿of￿ASML's￿Supervisory￿Board￿and￿BoM;
• Periodically￿evaluating￿the￿scope￿and￿composition￿of￿the￿BoM,￿the￿Supervisory￿Board,￿and￿proposing￿the￿profile￿of

the￿Supervisory￿Board￿in￿relation￿thereto;

• Periodically￿evaluating￿the￿functioning￿of￿the￿BoM￿and￿the￿Supervisory￿Board￿and￿the￿individual￿members￿of￿those

boards￿and￿reporting￿the￿results￿thereof￿to￿the￿Supervisory￿Board;￿and

• Proposing￿(re-)appointments￿of￿members￿of￿the￿BoM￿and￿the￿Supervisory￿Board,￿and￿supervising￿the￿policy￿of￿the

BoM￿in￿relation￿to￿the￿selection￿and￿appointment￿criteria￿for￿senior￿management.

The￿Selection￿and￿Nomination￿Committee￿furthermore￿discusses￿imminent￿corporate￿governance￿developments,￿for
example￿those￿based￿on￿legislative￿proposals,￿but￿also￿the￿outcome￿of￿the￿Report￿of￿the￿Monitoring￿Committee￿with
respect￿to￿compliance￿with￿the￿Code.

In￿2014,￿the￿Selection￿and￿Nomination￿Committee￿held￿three￿scheduled￿meetings￿and￿several￿ad￿hoc￿meetings,￿either￿in
person￿or￿by￿conference￿call.

Technology and Strategy Committee
The￿current￿members￿of￿our￿Technology￿and￿Strategy￿Committee￿are￿Mr.￿Grose￿(Chairman),￿Mr.￿Stork,￿Mr.￿Van￿der￿Poel
and￿Mr.￿Ziebart.￿The￿Technology￿and￿Strategy￿Committee￿may￿appoint￿one￿or￿more￿advisors￿from￿within￿and/or￿from
outside￿ASML.￿The￿advisors￿to￿the￿Technology￿and￿Strategy￿Committee￿may￿be￿invited￿as￿guests￿to￿the￿meetings,￿or
parts￿thereof,￿but￿are￿not￿entitled￿to￿vote￿in￿the￿meetings.

The￿Technology￿and￿Strategy￿Committee￿assists￿the￿Supervisory￿Board￿in￿relation￿to￿the￿following￿responsibilities￿and
may￿prepare￿resolutions￿for￿the￿Supervisory￿Board￿related￿thereto:
• Familiarization￿with￿and￿risk￿assessment￿and￿study￿of￿potential￿strategies,￿required￿technical￿resources,￿technology

roadmaps￿and￿product￿roadmaps;￿and

• Providing￿advice￿to￿the￿Supervisory￿Board￿with￿respect￿to￿matters￿related￿thereto.

In￿2014,￿the￿Technology￿and￿Strategy￿Committee￿held￿six￿scheduled￿meetings,￿either￿in￿person￿or￿via￿conference￿call.

Disclosure Committee
ASML￿has￿a￿Disclosure￿Committee￿to￿ensure￿compliance￿with￿applicable￿disclosure￿requirements￿arising￿under￿US￿and
Dutch￿law￿and￿applicable￿stock￿exchange￿rules,￿US￿GAAP,￿IFRS￿as￿adopted￿by￿the￿EU￿and￿the￿Sarbanes-Oxley￿Act.￿The
Disclosure￿Committee￿is￿composed￿of￿various￿members￿of￿senior￿management,￿and￿reports￿to￿the￿CEO￿and￿CFO.￿The
Disclosure￿Committee￿informs￿the￿Audit￿Committee￿about￿the￿outcome￿of￿the￿Disclosure￿Committee￿meetings.

The￿Disclosure￿Committee￿gathers￿all￿relevant￿financial￿and￿non-financial￿information￿and￿assesses￿materiality,
timeliness￿and￿necessity￿for￿disclosure￿of￿such￿information.￿In￿addition￿the￿Disclosure￿Committee￿advises￿the￿CEO￿and
CFO￿on￿the￿effectiveness￿of￿the￿disclosure￿controls￿and￿procedures￿and￿of￿the￿internal￿control￿over￿financial￿reporting
(Sarbanes-Oxley￿Act).

During￿2014,￿the￿Disclosure￿Committee￿reviewed￿amongst￿others￿the￿quarterly￿and￿annual￿financial￿result
announcements,￿the￿Statutory￿Interim￿Report,￿the￿Annual￿Report￿on￿Form￿20-F￿and￿the￿Statutory￿Annual￿Report.￿In
addition,￿the￿Disclosure￿Committee￿also￿advised￿the￿CEO￿and￿CFO￿on￿the￿effectiveness￿of￿the￿disclosure￿controls￿and
procedures￿and￿of￿the￿internal￿control￿over￿financial￿reporting￿(Sarbanes-Oxley￿Act).

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D. Employees
The￿following￿table￿presents￿our￿total￿numbers￿of￿payroll￿employees￿and￿temporary￿employees￿as￿of￿December￿31,
2014,￿2013￿and￿2012￿(in￿FTEs),￿primarily￿in￿manufacturing,￿product￿development￿and￿customer￿support￿activities:

As of December 31
Payroll￿Employees
Temporary￿Employees
Employees (in FTEs)

2014
11,318
2,754
14,072

2013
10,360
2,865
13,225

2012
8,497
2,139
10,636

During￿2014,￿the￿average￿number￿of￿payroll￿employees￿in￿FTEs￿employed￿was￿10,942,￿and￿the￿average￿number￿of
temporary￿employees￿in￿FTEs￿employed￿was￿2,804.￿The￿increase￿in￿2014￿compared￿to￿2013￿payroll￿employees￿in￿FTEs
is￿in￿line￿with￿our￿net￿sales￿growth.￿The￿increase￿in￿employees￿expressed￿in￿FTEs￿in￿2013￿compared￿to￿2012￿was￿mainly
due￿to￿the￿acquisition￿of￿Cymer￿as￿per￿May￿30,￿2013.

For￿a￿more￿detailed￿description￿of￿our￿payroll￿employee￿information,￿see￿Notes￿18￿and￿22￿to￿our￿Financial￿Statements.

Our￿future￿success￿also￿depends￿on￿our￿ability￿to￿attract,￿train,￿retain￿and￿motivate￿highly￿qualified,￿skilled￿and￿educated
employees,￿who￿are￿in￿great￿demand.￿We￿are￿particularly￿reliant￿on￿the￿services￿of￿several￿key￿employees,￿including
a￿number￿of￿systems￿development￿specialists￿with￿advanced￿university￿qualifications￿in￿engineering,￿optics￿and
computing.￿See￿Item￿3.D.￿"Risk￿Factors￿-￿Our￿Business￿and￿Future￿Success￿Depend￿on￿Our￿Ability￿to￿Attract￿and￿Retain
a￿Sufficient￿Number￿of￿Adequately￿Educated￿and￿Skilled￿Employees."

ASML￿Netherlands￿B.V.,￿our￿operating￿subsidiary￿in￿the￿Netherlands,￿has￿a￿Works￿Council,￿as￿required￿by￿Dutch
law.￿A￿Works￿Council￿is￿a￿representative￿body￿of￿the￿employees￿of￿a￿Dutch￿company￿elected￿by￿the￿employees.￿The
Board￿of￿Management￿of￿any￿Dutch￿company￿that￿runs￿an￿enterprise￿with￿a￿Works￿Council￿must￿seek￿the￿non-binding
advice￿of￿the￿Works￿Council￿before￿taking￿certain￿decisions￿with￿respect￿to￿ASML,￿such￿as￿those￿related￿to￿a￿major
restructuring,￿a￿change￿of￿control,￿or￿the￿appointment￿or￿dismissal￿of￿a￿member￿of￿the￿Board￿of￿Management.￿In￿case
the￿Works￿Council￿renders￿a￿contrary￿advice￿on￿a￿particular￿decision￿and￿the￿Board￿of￿Management￿nonetheless￿wishes
to￿proceed,￿the￿Board￿of￿Management￿must￿temporarily￿suspend￿any￿further￿action￿while￿the￿Works￿Council￿determines
whether￿to￿appeal￿to￿the￿Enterprise￿Chamber￿of￿the￿Amsterdam￿Court￿of￿Appeal.￿Other￿decisions￿directly￿involving
employment￿matters￿that￿apply￿either￿to￿all￿employees,￿or￿certain￿groups￿of￿employees,￿may￿only￿be￿taken￿with￿the
Works￿Council’s￿approval.￿Failing￿approval￿of￿the￿Works￿Council,￿the￿decision￿first￿has￿to￿be￿submitted￿to￿the￿Enterprise
Chamber￿of￿the￿Amsterdam￿Court￿of￿Appeal￿for￿mediation.￿If￿no￿resolution￿has￿been￿reached,￿the￿decision￿can￿only￿be
taken￿by￿with￿the￿approval￿of￿the￿Dutch￿District￿Court.

E. Share Ownership
For￿information￿with￿respect￿to￿the￿grant￿of￿shares￿and￿stock￿options￿to￿our￿employees￿See￿Note￿18￿to￿our￿Financial
Statements,￿Item￿6.B.￿"Compensation"￿and￿Item￿7A￿"Major￿Shareholders".

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40

Item 7 Major Shareholders and Related Party Transactions

A. Major Shareholders
The￿following￿table￿sets￿forth￿the￿total￿number￿of￿ordinary￿shares￿owned￿by￿each￿shareholder￿whose￿beneficial
ownership￿of￿ordinary￿shares￿is￿at￿least￿3.0￿percent￿of￿our￿ordinary￿shares￿issued￿and￿outstanding,￿as￿well￿as￿the
ordinary￿shares￿(including￿options)￿owned￿by￿our￿members￿of￿the￿BoM￿(which￿includes￿those￿persons￿specified￿in
Item￿6.A.￿"Directors,￿Senior￿Management￿and￿Employees"),￿as￿a￿group,￿as￿of￿December￿31,￿2014.￿The￿information￿set
out￿below￿with￿respect￿to￿shareholders￿other￿than￿the￿BoM￿is￿solely￿based￿on￿public￿filings￿with￿the￿SEC￿and￿AFM￿on
February￿4,￿2015.

Identity of Person or Group
Capital￿Group￿International,￿Inc1
Stichting￿Administratiekantoor￿MAKTSJAB/Intel2
BlackRock￿Inc.3
Stichting￿Administratiekantoor￿TSMC/TSMC4
The￿Growth￿Fund￿of￿America5
Members￿of￿ASML’s￿Board￿of￿Management￿(5￿persons)6,7

Shares
Owned
67,265,695
62,977,877
22,116,072
20,992,625
13,768,843
199,356

Percent of
Class8
15.54%
14.55%
5.11%
4.85%
3.18%
0.05%

1

2

3

4
5

6

7
8

As￿reported￿to￿the￿AFM￿on￿April￿25,￿2014,￿Capital￿Group￿International,￿Inc.￿and￿CRMC,￿which￿we￿believe￿to￿be￿an￿affiliate￿of￿Capital￿Group
International,￿Inc.,￿indirectly￿have￿605,391,255￿voting￿rights￿corresponding￿to￿67,265,695￿shares￿(based￿on￿nine￿votes￿per￿share)￿of￿our￿ordinary
shares￿but￿do￿not￿have￿ownership￿rights￿related￿to￿those￿shares.￿Capital￿World￿Investors￿reported￿on￿a￿Schedule￿13-G/A￿filed￿with￿the￿SEC￿on
February￿13,￿2014,￿that￿it￿is￿the￿beneficial￿owner￿of￿45,026,116￿shares￿of￿our￿ordinary￿shares￿as￿a￿result￿of￿its￿affiliation￿with￿CRMC.
Stichting￿Adminstratiekantoor￿MAKTSJAB￿owns￿the￿stated￿percentage￿of￿our￿ordinary￿shares￿and￿has￿issued￿corresponding￿depository￿receipts￿to
Intel.
Based￿solely￿on￿the￿Schedule￿13-G/A￿filed￿by￿BlackRock￿Inc.￿with￿the￿SEC￿on￿October￿8,￿2014.￿The￿July￿2,￿2013￿public￿filing￿with￿the￿AFM￿shows
aggregate￿holdings￿of￿various￿BlackRock￿funds￿of￿(based￿on￿total￿number￿of￿issued￿shares￿as￿per￿2￿July￿2013)￿3.68%￿in￿shares￿and￿4.42%￿in￿voting
rights.
Stichting￿Administratiekantoor￿TSMC￿owns￿the￿stated￿percentage￿of￿ordinary￿shares￿and￿has￿issued￿corresponding￿depository￿receipts￿to￿TSMC.
As￿reported￿to￿the￿AFM￿on￿May￿15,￿2014,￿The￿Growth￿Fund￿of￿America￿does￿not￿hold￿voting￿rights￿related￿to￿13,768,843￿shares￿of￿our￿ordinary
shares.￿We￿believe￿The￿Growth￿Fund￿of￿America￿to￿be￿a￿fund￿managed￿by￿CRMC￿as￿referred￿to￿in￿footnote￿1￿of￿this￿table.￿Accordingly,￿there￿may
be￿overlap￿between￿the￿shares￿reported￿to￿be￿owned￿by￿The￿Growth￿Fund￿of￿America￿and￿the￿shares￿reported￿to￿be￿owned￿by￿Capital￿Group
International,￿Inc.
Does￿not￿include￿unvested￿shares￿granted￿to￿members￿of￿ASML's￿BoM.￿Further￿information￿required￿by￿Item￿7.A.￿is￿incorporated￿by￿reference￿from
ASML’s￿2014￿Remuneration￿Report,￿see￿Item￿6.B.￿"Compensation".
No￿shares￿are￿owned￿by￿members￿of￿the￿Supervisory￿Board.
As￿a￿percentage￿of￿the￿total￿number￿of￿ordinary￿shares￿issued￿and￿outstanding￿(432,935,288)￿as￿of￿December￿31,￿2014,￿which￿excludes￿5,138,355
ordinary￿shares￿which￿have￿been￿issued￿but￿are￿held￿in￿treasury￿by￿ASML.￿Please￿note￿that￿share￿ownership￿percentages￿reported￿to￿the￿AFM￿are
expressed￿as￿a￿percentage￿of￿the￿total￿number￿of￿ordinary￿shares￿issued￿(including￿treasury￿stock)￿and￿that￿accordingly,￿percentages￿reflected￿in￿this
table￿may￿differ￿from￿percentages￿reported￿to￿the￿AFM.

The￿Intel￿Stichting￿and￿the￿TSMC￿Stichting￿acquired￿the￿shares￿indicated￿above￿as￿part￿of￿our￿CCIP￿in￿the￿second￿half
of￿2012.￿These￿Customer￿Stichtingen￿do￿not￿vote￿on￿the￿ordinary￿shares￿held￿by￿them,￿unless￿instructed￿to￿do￿so￿by
Intel￿and￿TSMC￿in￿accordance￿with￿their￿respective￿shareholder￿agreements.￿Intel￿and￿TSMC,￿are￿not￿entitled￿to￿vote
on￿the￿ASML￿shares￿held￿by￿their￿respective￿Customer￿Stichtingen,￿except￿in￿certain￿exceptional￿circumstances:￿i)
the￿authorization￿of￿certain￿significant￿share￿issuances￿and￿share￿repurchases,￿ii)￿any￿amendment￿to￿the￿Articles￿of
Association￿that￿would￿materially￿affect￿the￿specific￿voting￿rights￿of￿Intel￿or￿TSMC,￿iii)￿any￿significant￿change￿in￿the
identity￿or￿nature￿of￿ASML￿or￿its￿business,￿iv)￿the￿dissolution￿of￿ASML,￿v)￿any￿merger￿or￿demerger￿which￿would￿result￿in
a￿material￿change￿in￿the￿identity￿or￿nature￿of￿ASML￿or￿its￿business￿(see￿Item￿10.C.￿"Material￿Contracts￿-￿Customer￿Co-
Investment￿Program").

We￿do￿not￿issue￿share￿certificates.￿See￿Item￿10.B.￿"Memorandum￿and￿Articles￿of￿Association".

As￿of￿December￿31,￿2014,￿82,457,616￿NASDAQ￿shares￿were￿held￿by￿369￿registered￿holders￿with￿a￿registered￿address
in￿the￿United￿States.￿Since￿certain￿of￿our￿ordinary￿shares￿were￿held￿by￿brokers￿and￿nominees,￿the￿number￿of￿record
holders￿in￿the￿United￿States￿may￿not￿be￿representative￿of￿the￿number￿of￿beneficial￿holders￿or￿of￿where￿the￿beneficial
holders￿are￿resident.

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41

Obligations￿of￿Shareholders￿to￿Disclose￿Holdings￿under￿Dutch￿Law
Holders￿of￿our￿shares￿may￿be￿subject￿to￿reporting￿obligations￿under￿the￿FMSA.

The￿disclosure￿obligations￿under￿the￿FMSA￿apply￿to￿any￿person￿or￿entity￿that￿acquires,￿holds￿or￿disposes￿of￿an￿interest
in￿the￿voting￿rights￿and/or￿the￿capital￿of￿a￿public￿limited￿company￿incorporated￿under￿the￿laws￿of￿the￿Netherlands￿whose
shares￿are￿admitted￿to￿trading￿on￿a￿regulated￿market￿within￿the￿European￿Union,￿such￿as￿ASML.￿Disclosure￿is￿required
when￿the￿percentage￿of￿voting￿rights￿or￿capital￿interest￿of￿a￿person￿or￿an￿entity￿reaches,￿exceeds￿or￿falls￿below￿3.0,
5.0,￿10.0,￿15.0,￿20.0,￿25.0,￿30.0,￿40.0,￿50.0,￿60.0,￿75.0￿or￿95.0￿percent￿(as￿a￿result￿of￿an￿acquisition￿or￿disposal￿by￿such
person,￿or￿as￿a￿result￿of￿a￿change￿in￿our￿total￿number￿of￿voting￿rights￿or￿capital￿issued).￿With￿respect￿to￿ASML,￿the
FMSA￿requires￿any￿person￿or￿entity￿whose￿interest￿in￿the￿voting￿rights￿and/or￿capital￿of￿ASML￿reached,￿exceeded￿or￿fell
below￿those￿percentage￿interests￿to￿notify￿the￿AFM￿immediately.

ASML￿is￿required￿to￿notify￿the￿AFM￿immediately￿if￿our￿voting￿rights￿and/or￿capital￿have￿changed￿by￿1.0￿percent￿or
more￿since￿its￿previous￿notification￿on￿outstanding￿voting￿rights￿and￿capital.￿In￿addition,￿ASML￿must￿notify￿the￿AFM￿of
changes￿of￿less￿than￿1.0￿percent￿in￿ASML's￿outstanding￿voting￿rights￿and￿capital￿at￿least￿once￿per￿calendar￿quarter,
within￿eight￿days￿after￿the￿end￿of￿the￿quarter.￿Any￿person￿whose￿direct￿or￿indirect￿voting￿rights￿and/or￿capital￿interest
meets￿or￿passes￿the￿thresholds￿referred￿to￿in￿the￿previous￿paragraph￿as￿a￿result￿of￿a￿change￿in￿the￿outstanding￿voting
rights￿or￿capital￿must￿notify￿the￿AFM￿no￿later￿than￿the￿fourth￿trading￿day￿after￿the￿AFM￿has￿published￿such￿a￿change.

Once￿every￿calendar￿year,￿within￿four￿weeks￿after￿the￿end￿of￿the￿calendar￿year,￿holders￿of￿an￿interest￿of￿3.0￿percent￿or
more￿in￿ASML's￿voting￿rights￿or￿capital￿must￿notify￿the￿AFM￿of￿any￿changes￿in￿the￿composition￿of￿their￿interest￿resulting
from￿certain￿acts￿(including,￿but￿not￿limited￿to,￿the￿exchange￿of￿shares￿for￿depositary￿receipts￿and￿vice￿versa,￿and￿the
exercise￿of￿rights￿to￿acquire￿shares).

Subsidiaries,￿as￿defined￿in￿the￿FMSA,￿do￿not￿have￿independent￿reporting￿obligations￿under￿the￿FMSA,￿as￿interests
held￿by￿them￿are￿attributed￿to￿their￿(ultimate)￿parents.￿Any￿person￿may￿qualify￿as￿a￿parent￿for￿purposes￿of￿the￿FMSA,
including￿an￿individual.￿A￿person￿who￿ceases￿to￿be￿a￿subsidiary￿and￿who￿disposes￿of￿an￿interest￿of￿3.0￿percent￿or￿more
in￿ASML's￿voting￿rights￿or￿capital￿must￿immediately￿notify￿the￿AFM.￿As￿of￿that￿moment,￿all￿notification￿obligations￿under
the￿FMSA￿become￿applicable￿to￿the￿former￿subsidiary.

For￿the￿purpose￿of￿calculating￿the￿percentage￿of￿capital￿interest￿or￿voting￿rights,￿the￿following￿interests￿must,￿among
other￿arrangements,￿be￿taken￿into￿account:￿shares￿and￿votes￿(i)￿directly￿held￿by￿any￿person,￿(ii)￿held￿by￿such￿person’s
subsidiaries,￿(iii)￿held￿by￿a￿third￿party￿for￿such￿person’s￿account,￿(iv)￿held￿by￿a￿third￿party￿with￿whom￿such￿person￿has
concluded￿an￿oral￿or￿written￿voting￿agreement￿(including￿on￿the￿basis￿of￿an￿unrestricted￿power￿of￿attorney),￿(v)￿held
by￿a￿third￿party￿with￿whom￿such￿person￿has￿agreed￿to￿temporarily￿transfer￿voting￿rights￿against￿payment,￿(vi)￿financial
instruments￿of￿which￿the￿increase￿in￿value￿is￿wholly￿or￿partially￿dependent￿on￿an￿increase￿in￿value￿of￿our￿shares￿or
distributions￿in￿respect￿thereof￿(including￿certain￿cash￿settled￿financial￿instruments￿such￿as￿contracts￿for￿difference￿and
total￿return￿swaps),￿(vii)￿put￿options￿pursuant￿to￿which￿a￿person￿can￿be￿required￿to￿purchase￿our￿shares,￿and￿(vii)￿other
contracts￿under￿which￿a￿person￿has￿a￿position￿economically￿comparable￿to￿having￿our￿shares.￿Interests￿held￿jointly￿by
multiple￿persons￿are￿attributed￿to￿those￿persons￿in￿accordance￿with￿their￿entitlement.￿A￿holder￿of￿a￿pledge￿or￿right￿of
usufruct￿in￿respect￿of￿shares￿can￿also￿be￿subject￿to￿these￿reporting￿obligations￿if￿such￿person￿has,￿or￿can￿acquire,￿the
right￿to￿vote￿on￿the￿shares￿or,￿in￿case￿of￿depositary￿receipts,￿the￿underlying￿shares.￿The￿managers￿of￿certain￿investment
funds￿are￿deemed￿to￿hold￿the￿capital￿interests￿and￿voting￿rights￿in￿the￿funds￿managed￿by￿them.

For￿the￿same￿purpose,￿the￿following￿instruments￿qualify￿as￿"shares":￿(i)￿shares,￿(ii)￿depositary￿receipts￿for￿shares￿(or
negotiable￿instruments￿similar￿to￿such￿receipts),￿(iii)￿negotiable￿instruments￿for￿acquiring￿the￿instruments￿under￿(i)￿or￿(ii)
(such￿as￿convertible￿bonds),￿and￿(iv)￿options￿for￿acquiring￿the￿instruments￿under￿(i)￿or￿(ii).

The￿AFM￿requires￿the￿notification￿of￿any￿gross￿short￿position￿in￿our￿shares.￿For￿the￿notification￿of￿gross￿short￿positions
the￿same￿thresholds￿apply￿as￿for￿notifying￿an￿actual￿or￿potential￿interest￿in￿the￿capital￿and/or￿or￿voting￿rights￿of￿a￿Dutch
listed￿company,￿as￿referred￿to￿above.￿In￿addition,￿pursuant￿to￿Regulation￿(EU)￿No￿236/2012,￿each￿person￿holding￿a￿net
short￿position￿amounting￿to￿0.2￿percent￿of￿the￿issued￿share￿capital￿of￿a￿Dutch￿listed￿company￿is￿required￿to￿report￿it
to￿the￿AFM.￿Each￿subsequent￿increase￿of￿this￿position￿by￿0.1￿percent￿above￿0.2￿percent￿will￿also￿need￿to￿be￿reported.
Each￿net￿short￿position￿equal￿to￿0.5￿percent￿of￿the￿issued￿share￿capital￿of￿a￿Dutch￿listed￿company￿and￿any￿subsequent
increase￿of￿that￿position￿by￿0.1￿percent￿will￿be￿made￿public￿via￿the￿AFM￿short￿selling￿register.￿To￿calculate￿whether￿a
natural￿person￿or￿legal￿person￿has￿a￿net￿short￿position,￿their￿short￿positions￿and￿long￿positions￿must￿be￿set-off.￿A￿short
transaction￿in￿a￿share￿can￿only￿be￿contracted￿if￿a￿reasonable￿case￿can￿be￿made￿that￿the￿shares￿sold￿can￿actually￿be
delivered,￿which￿requires￿confirmation￿of￿a￿third￿party￿that￿the￿shares￿have￿been￿located.

The￿AFM￿keeps￿a￿public￿registry￿of￿and￿publishes￿all￿notifications￿made￿pursuant￿to￿the￿FMSA.

ASML￿ANNUAL￿REPORT￿2014

42

Non-compliance￿with￿the￿reporting￿obligations￿under￿the￿FMSA￿could￿lead￿to￿criminal￿fines,￿administrative￿fines,
imprisonment￿or￿other￿sanctions.￿In￿addition,￿non-compliance￿with￿the￿reporting￿obligations￿under￿the￿FMSA￿may￿lead￿to
civil￿sanctions,￿including￿(i)￿suspension￿of￿the￿voting￿rights￿relating￿to￿the￿shares￿held￿by￿the￿offender,￿for￿a￿period￿of￿not
more￿than￿three￿years,￿(ii)￿nullification￿of￿any￿resolution￿of￿our￿general￿meeting￿of￿shareholders￿to￿the￿extent￿that￿such
resolution￿would￿not￿have￿been￿approved￿if￿the￿votes￿at￿the￿disposal￿of￿the￿person￿or￿entity￿in￿violation￿of￿a￿duty￿under
the￿FMSA￿had￿not￿been￿exercised￿and￿(iii)￿a￿prohibition￿on￿the￿acquisition￿by￿the￿offender￿of￿our￿shares￿or￿the￿voting￿on
our￿ordinary￿shares￿for￿a￿period￿of￿not￿more￿than￿five￿years.

We￿may￿request￿Euroclear￿Nederland￿and￿its￿admitted￿institutions￿as￿well￿as￿intermediaries,￿institutions￿and￿custodians
of￿investment￿funds￿(in￿the￿Netherlands￿and￿abroad)￿of￿which￿we￿reasonably￿expect￿that￿they￿hold￿our￿shares￿other
than￿as￿beneficial￿owner,￿to￿provide￿certain￿details￿on￿the￿identity￿and￿number￿of￿shares￿held,￿of￿their￿clients￿for￿whom
they￿hold￿our￿shares.￿We￿must￿keep￿the￿information￿received￿confidential.￿We￿may￿only￿make￿such￿requests￿during￿a
period￿of￿60￿days￿prior￿to￿the￿day￿on￿which￿our￿general￿meeting￿of￿shareholders￿will￿be￿held.￿No￿details￿are￿required￿to
be￿given￿in￿respect￿of￿shareholders￿with￿an￿interest￿of￿less￿than￿0.5￿percent￿of￿our￿issued￿share￿capital.￿A￿shareholder
who,￿individually￿or￿together￿with￿other￿shareholders,￿holds￿an￿interest￿of￿at￿least￿10￿percent￿of￿the￿issued￿share￿capital
may￿request￿us￿to￿establish￿the￿identity￿of￿our￿shareholders￿in￿this￿manner￿so￿that￿we￿can￿forward￿to￿them￿information
provided￿by￿such￿shareholder￿in￿respect￿of￿an￿item￿on￿the￿agenda￿for￿the￿general￿meeting.￿This￿request￿may￿only￿be
made￿during￿a￿period￿of￿60￿days￿until￿(and￿not￿including)￿the￿42nd￿day￿before￿the￿day￿on￿which￿the￿general￿meeting￿of
shareholders￿will￿be￿held.

B. Related Party Transactions
On￿July￿9,￿2012,￿we￿announced￿our￿CCIP￿to￿accelerate￿our￿development￿of￿EUV￿technology￿beyond￿the￿current
generation￿and￿our￿development￿of￿future￿450mm￿silicon￿wafer￿technology.￿The￿Participating￿Customers￿collectively
agreed￿to￿fund￿EUR￿1.38￿billion￿of￿our￿research￿and￿development￿projects￿from￿2013￿through￿2017.￿This￿program
creates￿risk￿sharing￿with￿some￿of￿our￿largest￿customers￿while￿the￿results￿of￿ASML’s￿development￿programs￿will￿be
available￿to￿every￿semiconductor￿manufacturer￿with￿no￿restrictions.￿The￿R&D￿funding￿program￿in￿the￿CCIP￿consists￿of
two￿funding￿projects:￿a￿450mm￿technology￿development￿project￿and￿a￿next-generation￿EUV￿development￿project.￿ASML
has￿entered￿into￿NRE￿Funding￿Agreements￿with￿the￿Participating￿Customers.

In￿addition￿to￿the￿funding￿commitments￿described￿above,￿the￿Participating￿Customers￿have￿invested￿in￿ordinary￿shares
equal,￿in￿aggregate,￿to￿23￿percent￿of￿ASML's￿issued￿share￿capital￿(calculated￿giving￿effect￿to￿our￿synthetic￿share
buyback￿in￿November￿2012).￿The￿proceeds￿of￿the￿share￿issuance,￿EUR￿3.85￿billion,￿were￿returned￿to￿the￿holders￿of
ordinary￿shares￿(excluding￿the￿Participating￿Customers)￿through￿a￿synthetic￿share￿buyback￿executed￿in￿November￿2012.

Intel￿is￿the￿largest￿participant￿in￿the￿program,￿with￿an￿aggregate￿funding￿commitment￿of￿EUR￿829￿million￿and￿an
investment￿in￿15￿percent￿of￿our￿ordinary￿shares￿(after￿giving￿effect￿to￿the￿synthetic￿share￿buyback￿in￿November￿2012).￿

Please￿see￿Item￿10.C￿"Material￿Contracts￿-￿Customer￿Co-Investment￿Program"￿and￿Note￿29￿to￿our￿Financial￿Statements
for￿more￿information￿about￿the￿CCIP.￿See￿Note￿29￿to￿our￿Financial￿Statements￿for￿details￿on￿sales￿to￿Intel￿in￿2014￿and
outstanding￿balances￿as￿of￿December￿31,￿2014.

There￿have￿been￿no￿other￿transactions￿during￿our￿most￿recent￿fiscal￿year,￿and￿there￿are￿currently￿no￿transactions,
between￿ASML￿or￿any￿of￿its￿subsidiaries,￿and￿any￿significant￿shareholder￿and￿any￿director￿or￿officer￿or￿any￿relative
or￿spouse￿thereof￿other￿than￿ordinary￿course￿compensation￿arrangements.￿During￿our￿most￿recent￿fiscal￿year,￿there
has￿been￿no,￿and￿at￿present￿there￿is￿no,￿outstanding￿indebtedness￿to￿ASML￿owed￿or￿owing￿by￿any￿director￿or￿officer
of￿ASML￿or￿any￿associate￿thereof,￿other￿than￿the￿virtual￿financing￿arrangement￿with￿respect￿to￿shares￿and￿stock
options￿described￿under￿Note￿18￿to￿our￿Financial￿Statements.￿Furthermore,￿ASML￿has￿not￿granted￿any￿personal￿loans,
guarantees,￿or￿the￿like￿to￿members￿of￿the￿BoM￿or￿Supervisory￿Board.

C. Interests of Experts & Counsel
Not￿applicable.

ASML￿ANNUAL￿REPORT￿2014

43

Item 8 Financial Information

A. Consolidated Statements and Other Financial Information

Consolidated Financial Statements
See￿Item￿18￿"Financial￿Statements".

Export Sales
See￿Note￿21￿to￿our￿Financial￿Statements.

Legal Proceedings
See￿Item￿4.B.￿"Business￿Overview￿-￿Intellectual￿Property"￿and￿Note￿19￿to￿our￿Financial￿Statements.

Dividend Policy
As￿part￿of￿our￿financing￿policy,￿we￿aim￿to￿pay￿an￿annual￿dividend￿that￿will￿be￿stable￿or￿growing￿over￿time.￿Annually,￿the
BoM￿will,￿upon￿prior￿approval￿from￿the￿Supervisory￿Board,￿submit￿a￿proposal￿to￿the￿AGM￿with￿respect￿to￿the￿amount
of￿dividend￿to￿be￿declared￿with￿respect￿to￿the￿prior￿year.￿The￿dividend￿proposal￿in￿any￿given￿year￿will￿be￿subject￿to￿the
availability￿of￿distributable￿profits￿or￿retained￿earnings￿and￿may￿be￿affected￿by,￿among￿other￿factors,￿the￿BoM's￿views
on￿our￿potential￿future￿liquidity￿requirements,￿including￿for￿investments￿in￿production￿capacity,￿the￿funding￿of￿our￿R&D
programs￿and￿for￿acquisition￿opportunities￿that￿may￿arise￿from￿time￿to￿time;￿and￿by￿future￿changes￿in￿applicable￿income
tax￿and￿corporate￿laws.￿Accordingly,￿it￿may￿be￿decided￿to￿propose￿not￿to￿pay￿a￿dividend￿or￿to￿pay￿a￿lower￿dividend￿with
respect￿to￿any￿particular￿year￿in￿the￿future.

For￿2014,￿a￿proposal￿to￿declare￿a￿dividend￿of￿EUR￿0.70￿per￿ordinary￿share￿of￿EUR￿0.09￿nominal￿value￿will￿be￿submitted
to￿the￿2015￿AGM.

B. Significant Changes
No￿significant￿changes￿have￿occurred￿since￿the￿date￿of￿our￿Financial￿Statements.￿See￿Item￿5.D.￿"Trend￿Information"￿and
Note￿30￿to￿the￿Financial￿Statements.

Item 9 The Offer and Listing

A. Offer and Listing Details
Our￿ordinary￿shares￿are￿listed￿for￿trading￿in￿the￿form￿of￿registered￿ASML￿NASDAQ￿shares￿and￿in￿the￿form￿of￿registered
ASML￿Euronext￿Amsterdam￿shares.￿The￿principal￿trading￿market￿of￿our￿ordinary￿shares￿is￿Euronext￿Amsterdam.
Our￿ordinary￿shares￿also￿trade￿on￿NASDAQ.￿For￿more￿information￿see￿Item￿10.B.￿''Memorandum￿and￿Articles￿of
Association''.

Our￿shares￿listed￿on￿NASDAQ￿are￿registered￿with￿J.P.￿Morgan,￿our￿New￿York￿Transfer￿Agent,￿pursuant￿to￿the￿terms
of￿the￿Transfer￿Agent￿Agreement￿between￿ASML￿and￿J.P￿Morgan.￿Our￿shares￿listed￿on￿Euronext￿Amsterdam￿are￿held
in￿dematerialized￿form￿through￿the￿facilities￿of￿Euroclear￿Nederland,￿the￿Dutch￿centralized￿securities￿custody￿and
administration￿system.￿The￿New￿York￿Transfer￿Agent￿charges￿shareholders￿a￿fee￿of￿USD￿5.00￿per￿100￿shares￿for￿the
exchange￿of￿our￿shares￿listed￿at￿NASDAQ￿for￿our￿shares￿listed￿at￿Euronext￿Amsterdam￿and￿vice￿versa.

Dividends￿payable￿on￿our￿shares￿listed￿at￿NASDAQ￿are￿declared￿in￿euro￿and￿converted￿to￿U.S.￿dollar￿at￿the￿rate￿of
exchange￿at￿the￿close￿of￿business￿on￿the￿date￿determined￿by￿the￿BoM.￿The￿resulting￿amounts￿are￿distributed￿through
the￿New￿York￿Transfer￿Agent￿and￿no￿charge￿is￿payable￿by￿holders￿of￿our￿shares￿listed￿at￿NASDAQ￿in￿connection￿with￿this
conversion￿or￿distribution.

Pursuant￿to￿the￿terms￿of￿the￿Transfer￿Agent￿Agreement,￿we￿have￿agreed￿to￿reimburse￿the￿New￿York￿Transfer￿Agent￿for
certain￿out￿of￿pocket￿expenses,￿including￿in￿connection￿with￿any￿mailing￿of￿notices,￿reports￿or￿other￿communications
made￿generally￿available￿by￿ASML￿to￿holders￿of￿ordinary￿shares.￿The￿New￿York￿Transfer￿Agent￿has￿waived￿its￿fees
associated￿with￿routine￿services￿to￿ASML￿associated￿with￿our￿shares￿listed￿at￿NASDAQ.￿In￿addition,￿the￿New￿York
Transfer￿Agent￿has￿agreed￿to￿reimburse￿certain￿reasonable￿expenses￿incurred￿by￿ASML￿in￿connection￿with￿the￿issuance
and￿transfer￿of￿our￿shares￿listed￿at￿NASDAQ.￿In￿the￿year￿ended￿December￿31,￿2014,￿the￿Transfer￿Agent￿reimbursed￿USD
0.8￿million￿of￿expenses￿incurred￿by￿ASML￿(which￿mainly￿comprised￿of￿audit,￿advisory,￿legal￿and￿listing￿fees￿incurred￿due
to￿the￿existence￿of￿our￿shares￿listed￿at￿NASDAQ).

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The￿following￿table￿sets￿forth,￿for￿the￿periods￿indicated,￿the￿high￿and￿low￿closing￿prices￿of￿our￿shares￿listed￿at￿NASDAQ
and￿our￿shares￿listed￿at￿Euronext￿Amsterdam.

Annual Information
2014
2013
2012
2011
2010
Quarterly Information
4th￿quarter￿2014
3rd￿quarter￿2014
2nd￿quarter￿2014
1st￿quarter￿2014

4th￿quarter￿2013
3rd￿quarter￿2013
2nd￿quarter￿2013
1st￿quarter￿2013
Monthly Information
February￿(through￿February￿5)￿2015
January￿2015
December￿2014
November￿2014
October￿2014
September￿2014
August￿2014

ASML NASDAQ shares
USD

ASML Euronext Amsterdam shares
EUR

High

109.64
100.96
64.68
45.82
38.45

109.64
102.13
94.80
93.36

100.96
98.76
84.08
78.21

103.89
107.60
109.64
105.91
99.68
102.13
96.12

Low

79.90
63.08
40.91
31.08
24.73

90.06
83.28
79.90
84.09

86.94
78.40
66.08
63.08

101.84
100.72
103.35
98.96
90.06
97.21
90.83

High

89.88
74.30
49.36
32.81
29.26

89.88
78.89
69.61
67.76

74.30
73.00
65.55
56.80

90.85
94.78
89.88
85.21
79.45
78.89
72.81

Low

57.57
47.20
31.81
22.28
19.68

70.20
62.20
57.57
62.05

63.87
60.66
50.62
47.20

89.21
84.67
83.15
78.40
70.20
73.57
67.65

B. Plan of Distribution
Not￿applicable.

C. Markets
See￿Item￿9.A.￿"Offer￿and￿Listing￿Details".

D. Selling Shareholders
Not￿applicable.

E. Dilution
Not￿applicable.

F. Expenses of the Issue
Not￿applicable.

Item 10 Additional Information

A. Share Capital
Not￿applicable.

B. Memorandum and Articles of Association
Our￿Articles￿of￿Association￿included￿as￿Exhibit￿99.1￿to￿our￿form￿6-K￿filed￿furnished￿with￿the￿SEC￿on￿February￿8,￿2013
(the￿"Articles￿of￿Association").

Current Authorizations to Issue and Repurchase Ordinary Shares
Our￿BoM￿has￿the￿power￿to￿issue￿ordinary￿and￿preference￿shares￿if￿and￿insofar￿as￿the￿BoM￿has￿been￿authorized￿to￿do
so￿by￿the￿General￿Meeting￿of￿Shareholders.￿The￿BoM￿requires￿the￿approval￿of￿the￿Supervisory￿Board￿for￿such￿an￿issue.
An￿authorization￿of￿the￿BoM￿to￿issue￿shares￿or￿preference￿shares￿may￿be￿effective￿for￿a￿specified￿period￿of￿up￿to￿five
years￿and￿may￿be￿renewed.￿In￿the￿absence￿of￿such￿authorization,￿the￿General￿Meeting￿of￿Shareholders￿has￿the￿power
to￿authorize￿the￿issuance￿of￿ordinary￿or￿preference￿shares,￿upon￿the￿proposal￿of￿the￿BoM,￿which￿proposal￿must￿be
authorized￿by￿the￿Supervisory￿Board.

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At￿our￿2014￿AGM,￿our￿shareholders￿authorized￿the￿BoM￿to￿issue￿shares￿and/or￿rights￿thereto￿through￿October￿23,￿2015,
up￿to￿an￿aggregate￿maximum￿of￿5.0￿percent￿of￿ASML's￿issued￿share￿capital,￿plus￿an￿additional￿5.0￿percent￿of￿our￿issued
share￿capital￿at￿April￿23,￿2014￿that￿may￿be￿issued￿in￿connection￿with￿mergers,￿acquisitions￿and/or￿(strategic)￿alliances.
At￿our￿2015￿AGM,￿our￿shareholders￿will￿be￿asked￿to￿extend￿this￿authority￿through￿October￿22,￿2016.

Holders￿of￿ASML’s￿ordinary￿shares￿have￿a￿preemptive￿right￿of￿subscription,￿in￿proportion￿to￿the￿aggregate￿nominal
amount￿of￿the￿ordinary￿shares￿held￿by￿them,￿to￿any￿issuance￿of￿ordinary￿shares￿for￿cash,￿which￿right￿may￿be￿restricted
or￿excluded.￿Ordinary￿shareholders￿have￿no￿pro￿rata￿preemptive￿right￿of￿subscription￿to￿any￿ordinary￿shares￿issued￿for
consideration￿other￿than￿cash￿or￿ordinary￿shares￿issued￿to￿employees.￿If￿authorized￿for￿this￿purpose￿by￿the￿General
Meeting￿of￿Shareholders,￿the￿BoM￿has￿the￿power￿subject￿to￿approval￿of￿the￿Supervisory￿Board,￿to￿restrict￿or￿exclude￿the
preemptive￿rights￿of￿holders￿of￿ordinary￿shares.￿At￿our￿2014￿AGM,￿our￿shareholders￿authorized￿the￿BoM￿through￿October
23,￿2015,￿subject￿to￿approval￿of￿the￿Supervisory￿Board,￿to￿restrict￿or￿exclude￿preemptive￿rights￿of￿holders￿of￿ordinary
shares￿up￿to￿a￿maximum￿of￿10￿percent￿of￿our￿issued￿share￿capital.￿At￿our￿2015￿AGM,￿our￿shareholders￿will￿be￿asked￿to
extend￿this￿authority￿through￿October￿22,￿2016.

In￿addition,￿the￿articles￿of￿association￿provide￿for￿9,000￿ordinary￿shares￿B￿with￿a￿nominal￿value￿of￿EUR￿0.01￿to￿allow
holders￿of￿fractional￿shares￿to￿obtain￿voting￿rights￿with￿respect￿to￿those￿fractional￿shares.

We￿may￿repurchase￿our￿issued￿ordinary￿shares￿at￿any￿time,￿subject￿to￿compliance￿with￿the￿requirements￿of￿Dutch￿law
and￿our￿Articles￿of￿Association.￿Any￿such￿repurchases￿are￿subject￿to￿the￿approval￿of￿the￿Supervisory￿Board￿and￿the
authorization￿of￿shareholders￿at￿our￿General￿Meeting￿of￿Shareholders,￿which￿authorization￿may￿not￿be￿for￿more￿than
18￿months.￿The￿BoM￿is￿currently￿authorized,￿subject￿to￿Supervisory￿Board￿approval,￿to￿repurchase￿as￿of￿April￿23,￿2014
through￿October￿23,￿2015,￿up￿to￿a￿maximum￿of￿two￿times￿10.0￿percent￿of￿ASML's￿issued￿share￿capital￿as￿of￿April￿23,
2014,￿at￿a￿price￿between￿the￿nominal￿value￿of￿the￿ordinary￿shares￿purchased￿and￿110.0￿percent￿of￿the￿market￿price￿of
these￿securities￿on￿Euronext￿Amsterdam￿or￿NASDAQ.￿At￿our￿2015￿AGM,￿our￿shareholders￿will￿be￿asked￿to￿extend￿this
authorization￿through￿October￿22,￿2016.

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46

C. Material Contracts

Customer Co-Investment Program
On￿July￿9,￿2012,￿we￿announced￿our￿CCIP￿to￿accelerate￿our￿development￿of￿EUV￿technology￿beyond￿the￿current
generation￿and￿our￿development￿of￿future￿450mm￿silicon￿wafer￿technology.￿The￿Participating￿Customers￿collectively
agreed￿to￿fund￿EUR￿1.38￿billion￿of￿our￿research￿and￿development￿projects￿from￿2013￿through￿2017.￿This￿program
created￿risk￿sharing￿with￿some￿of￿our￿largest￿customers￿while￿the￿results￿of￿ASML’s￿development￿programs￿will￿be
available￿to￿every￿semiconductor￿manufacturer￿with￿no￿restrictions.￿The￿R&D￿funding￿program￿in￿the￿CCIP￿consists￿of
two￿funding￿projects:￿a￿450mm￿technology￿development￿project￿and￿a￿next-generation￿EUV￿development￿project.￿ASML
entered￿into￿NRE￿Funding￿Agreements￿with￿the￿Participating￿Customers.

Development 450mm silicon wafer technology
As￿previously￿disclosed,￿in￿November￿2013,￿ASML￿decided￿to￿pause￿the￿development￿of￿450mm￿lithography￿systems
until￿customer￿demand￿and￿the￿timing￿related￿to￿such￿demand￿is￿clear.￿We￿have￿agreed￿with￿Intel￿that￿the￿450mm￿NRE
funding￿will￿be￿applied￿to￿other￿lithography￿projects,￿including￿generic￿developments￿applicable￿to￿both￿300mm￿and
450mm.￿We￿believe￿that￿our￿450mm￿development￿activities￿can￿be￿restarted￿if￿and￿when￿the￿industry￿demands￿the
introduction￿of￿450mm.

In￿addition￿to￿the￿funding￿commitments￿described￿above,￿the￿Participating￿Customers￿have￿invested￿in￿96,566,077￿of
our￿ordinary￿shares,￿the￿proceeds￿of￿which,￿totalling￿EUR￿3.85￿billion,￿were￿returned￿to￿the￿holders￿of￿ordinary￿shares
(excluding￿the￿Participating￿Customers)￿through￿a￿synthetic￿share￿buyback￿executed￿in￿November￿2012.￿For￿further
information￿regarding￿the￿synthetic￿share￿buyback,￿see￿Note￿26￿to￿our￿Financial￿Statements.

Description of Investment Agreements, Shareholder Agreements and NRE Funding Agreements
In￿connection￿with￿the￿CCIP,￿ASML￿entered￿into￿an￿investment￿agreement,￿a￿shareholder￿agreement￿and￿NRE￿Funding
Agreements￿with￿each￿of￿the￿Participating￿Customers.￿Intel￿is￿the￿largest￿participant￿in￿the￿program,￿with￿an￿aggregate
funding￿commitment￿of￿EUR￿829￿million￿and￿an￿investment￿in￿62,977,877￿of￿our￿ordinary￿shares.￿A￿description￿of￿the
shareholders￿agreement￿and￿NRE￿Funding￿Agreements￿between￿ASML￿and￿Intel￿is￿set￿out￿below.￿The￿shareholders
agreements￿and￿the￿NRE￿Funding￿Agreements￿between￿ASML￿and￿the￿other￿program￿participants￿-￿TSMC￿(which
acquired￿20,992,625￿of￿our￿ordinary￿shares￿and￿made￿an￿EUR￿276￿million￿funding￿commitment)￿and￿Samsung￿(which
acquired￿12,595,575￿of￿our￿ordinary￿shares￿and￿made￿an￿EUR￿276￿million￿funding￿commitment)￿are￿on￿substantially￿the
same￿terms￿as￿those￿agreed￿with￿Intel.￿Shares￿were￿acquired￿by￿Dutch￿foundations￿("Stichtingen￿)￿established￿for￿each
participant.

Investment Agreement
Pursuant￿to￿the￿Intel￿Investment￿Agreement￿between￿ASML￿and￿Intel,￿dated￿July￿9,￿2012,￿ASML￿agreed￿to￿issue￿to￿a
foundation￿established￿for￿the￿Intel￿Stichting￿ordinary￿shares￿equal￿to￿15￿percent￿of￿ASML's￿issued￿ordinary￿shares;
the￿Intel￿Stichting￿issued￿to￿Intel￿depositary￿receipts￿representing￿the￿ordinary￿shares.￿The￿subscription￿price￿for￿the
ordinary￿shares￿issued￿to￿Intel￿was￿EUR￿39.91￿per￿ordinary￿share,￿which￿is￿the￿average￿of￿the￿volume￿weighted￿average
price￿of￿our￿shares￿listed￿at￿Euronext￿Amsterdam￿for￿the￿twenty￿trading￿days￿up￿to￿and￿including￿July￿6,￿2012.

Under￿the￿Intel￿Investment￿Agreement,￿ASML￿has￿agreed￿to￿indemnify￿Intel,￿and￿its￿affiliates￿for￿certain￿losses￿and
expenses￿related￿to￿breaches￿of￿representations,￿warranties,￿covenants￿and￿agreements￿in￿the￿Investment￿Agreements
and￿with￿respect￿to￿certain￿legal￿proceedings￿related￿thereto,￿subject￿to￿certain￿limitations.

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Shareholder Agreement
In￿connection￿with￿the￿issuance￿of￿shares￿pursuant￿to￿the￿Intel￿Investment￿Agreement,￿on￿September￿12,￿2012￿ASML,
Intel￿and￿the￿Intel￿Stichting￿entered￿into￿a￿Shareholder￿Agreement￿which￿governs￿certain￿matters￿relating￿to￿the￿holding
of￿and￿further￿investment￿by￿Intel￿in￿ordinary￿shares￿of￿ASML,￿directly￿and￿indirectly￿through￿the￿Intel￿Stichting,￿including
the￿matters￿described￿below.

Voting Restrictions
Pursuant￿to￿the￿Intel￿Shareholder￿Agreement,￿Intel￿(and￿the￿Intel￿Stichting)￿will￿not￿be￿entitled￿to￿vote￿the￿ordinary￿shares
that￿were￿acquired￿by￿the￿Intel￿Stichting￿as￿part￿of￿the￿CCIP￿or￿any￿other￿ordinary￿shares￿otherwise￿transferred￿to￿the
Intel￿Stichting￿(under￿the￿circumstances￿described￿under￿"Standstill;￿Additional￿Purchases"￿below)￿prior￿to￿a￿Shareholder
Agreement￿Termination￿Event￿(as￿defined￿below),￿except￿when￿a￿Suspension￿Event￿(as￿described￿below)￿occurs￿and
is￿continuing￿or￿where￿the￿following￿matters￿are￿proposed￿at￿any￿General￿Meeting￿(the￿"Voting￿Restrictions"):￿(i)￿an
issuance￿of￿ASML￿shares￿or￿grant￿of￿rights￿to￿subscribe￿for￿ASML￿shares￿representing￿25￿percent￿or￿more￿of￿the￿issued
and￿outstanding￿share￿capital￿of￿ASML￿or￿the￿restriction￿or￿exclusion￿of￿pre-emption￿rights￿relating￿thereto￿(in￿each
case,￿on￿an￿aggregate￿basis￿during￿the￿preceding￿12￿months)￿or￿the￿designation￿of￿the￿BoM￿as￿the￿authorized￿body
to￿resolve￿on￿these￿matters;￿(ii)￿an￿authorization￿to￿repurchase￿25￿percent￿or￿more￿of￿ASML’s￿issued￿and￿outstanding
share￿capital￿on￿an￿aggregate￿basis￿during￿the￿preceding￿12￿months;￿(iii)￿the￿approval￿of￿a￿significant￿change￿in￿the
identity￿or￿nature￿of￿ASML￿or￿its￿business,￿including￿a￿transfer￿of￿all￿or￿substantially￿all￿business￿or￿assets￿of￿ASML￿and
its￿subsidiaries￿to￿a￿third￿party,￿the￿establishment￿or￿cancellation￿of￿a￿long-lasting￿cooperation￿of￿essential￿importance
with￿a￿third￿party￿and￿an￿acquisition￿or￿disposition￿of￿an￿interest￿in￿the￿capital￿or￿assets￿of￿a￿person￿with￿a￿value￿of￿at
least￿one￿third￿of￿the￿assets￿of￿ASML￿(on￿a￿consolidated￿basis);￿(iv)￿an￿amendment￿to￿ASML’s￿Articles￿of￿Association
that￿would￿materially￿affect￿the￿specific￿voting￿rights￿of￿Intel,￿would￿materially￿affect￿the￿identity￿or￿nature￿of￿ASML￿or
its￿business,￿or￿would￿disproportionately￿(or￿uniquely)￿and￿adversely￿affect￿the￿rights￿or￿benefits￿attached￿to￿or￿derived
from￿the￿ordinary￿shares￿held￿by￿Intel￿through￿the￿Intel￿Stichting￿as￿compared￿to￿the￿shareholders;￿(v)￿the￿dissolution￿of
ASML;￿and￿(vi)￿any￿merger￿or￿demerger￿which￿would￿result￿in￿a￿material￿change￿in￿the￿identity￿or￿nature￿of￿ASML￿or￿its
business.

Standstill, Lock-up and Orderly Market Arrangements
Standstill;￿Additional￿Purchases
Subject￿to￿certain￿exceptions,￿pursuant￿to￿the￿Shareholder￿Agreement,￿Intel￿(or￿its￿affiliates)￿may￿not,￿prior￿to￿the
six-year￿anniversary￿of￿the￿date￿of￿the￿Intel￿Shareholder￿Agreement￿(the￿"Standstill￿Period"),￿acquire￿more￿than￿19.9
percent￿of￿the￿outstanding￿share￿capital￿of￿ASML￿without￿ASML’s￿prior￿approval￿(the￿"Standstill￿Restriction").￿There￿is
an￿exception￿from￿the￿Standstill￿Restriction￿in￿the￿case￿of￿a￿‘suspension￿event’,￿which￿includes￿certain￿circumstances
where￿a￿third￿party￿has￿acquired￿or￿made￿an￿offer￿to￿acquire￿at￿least￿20￿percent￿of￿ASML’s￿outstanding￿shares,￿and￿the
Standstill￿Restriction￿will￿terminate￿upon￿the￿occurrence￿of￿a￿Shareholder￿Agreement￿Termination￿Event.

The￿Shareholder￿Agreement￿permits￿Intel￿(and￿its￿affiliates)￿to￿acquire￿up￿to￿4.99￿percent￿of￿ASML's￿outstanding￿shares
(other￿than￿shares￿acquired￿through￿the￿CCIP)￿that￿may￿be￿held￿outside￿the￿Intel￿Stichting.￿For￿any￿additional￿ASML
shares￿that￿Intel￿(or￿its￿affiliates)￿acquires￿in￿excess￿of￿4.99￿percent￿of￿the￿outstanding￿shares￿of￿ASML,￿Intel￿is￿required
to￿deposit￿such￿shares￿with￿the￿Intel￿Stichting￿in￿exchange￿for￿Depositary￿Receipts.￿Shares￿held￿directly￿by￿Intel￿or￿its
affiliates￿(and￿which￿not￿required￿to￿be￿deposited￿with￿the￿Intel￿Stichting)￿are￿not￿subject￿to￿the￿Voting￿Restrictions,￿or
Lock-Up￿Restrictions￿(as￿defined￿below),￿but￿are￿subject￿to￿the￿Standstill￿Restriction.

The￿Intel￿Stichting￿will￿continue￿to￿hold￿ASML￿shares￿owned￿by￿Intel￿(notwithstanding￿termination￿of￿the￿Standstill
Period)￿until￿the￿earlier￿of￿(i)￿￿such￿time￿as￿Intel￿owns￿(directly￿or￿through￿the￿Intel￿Stichting)￿less￿than￿2￿percent￿of
ASML’s￿outstanding￿shares￿(the￿relevant￿percentage￿is￿1￿percent￿for￿the￿other￿Participating￿Customers)￿(ii)￿the￿date
of￿notification￿to￿ASML￿by￿Participating￿Customers￿that￿the￿aggregate￿amount￿of￿ASML’s￿outstanding￿shares￿owned
by￿Intel￿and￿the￿other￿Participating￿Customers￿represents￿less￿than￿5￿percent￿of￿ASML’s￿outstanding￿shares￿and￿(iii)
a￿Shareholder￿Agreement￿Termination￿Event￿(as￿defined￿below),￿following￿which￿time￿Depositary￿Receipts￿will￿be
exchanged￿for￿the￿underlying￿ASML￿shares.￿In￿case￿Intel￿would￿acquire￿ASML￿shares￿within￿18￿months￿after￿an￿event
described￿under￿(i)￿or￿(ii)￿above,￿any￿ASML￿shares￿held￿by￿Intel￿in￿excess￿of￿4.99￿percent￿of￿the￿outstanding￿shares￿of
ASML￿must￿be￿transferred￿to￿(and￿held￿by)￿the￿Intel￿Stichting.

Lock-up;￿Orderly￿Sell￿Down
Intel￿may￿not,￿without￿prior￿written￿consent￿of￿ASML,￿transfer￿any￿ordinary￿shares￿or￿Depositary￿Receipts￿until￿the
earliest￿of￿(i)￿two￿years￿and￿six￿months￿after￿the￿date￿of￿the￿Intel￿Shareholder￿Agreement,￿(ii)￿termination￿of￿the￿NRE
Funding￿Agreements,￿and￿(iii)￿the￿occurrence￿of￿a￿Shareholder￿Agreement￿Termination￿Event￿((i),￿(ii)￿and￿(iii)￿together,￿the
"Lock-Up￿Restriction").￿The￿Lock-Up￿Restriction￿does￿not￿apply￿in￿certain￿circumstances￿where￿a￿third￿party￿offers￿to
acquire￿at￿least￿20￿percent￿of￿ASML’s￿shares.￿Intel￿is￿not￿permitted￿to￿transfer￿the￿ASML￿ordinary￿shares￿it￿acquired￿in
the￿program￿in￿connection￿with￿an￿offer￿(before￿the￿end￿of￿the￿offer),￿or￿make￿any￿public￿statement￿in￿support￿of￿such
offer,￿that￿is￿not￿recommended￿by￿the￿ASML￿Supervisory￿Board￿or￿Management￿Board,￿except￿in￿limited￿circumstances.

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In￿addition,￿Intel￿may￿not￿(even￿after￿the￿Lock-Up￿Restriction￿has￿ended),￿without￿written￿consent￿of￿ASML,￿transfer
on￿Euronext￿Amsterdam,￿NASDAQ￿or￿another￿securities￿exchange￿more￿than￿(i)￿in￿respect￿of￿Intel,￿4￿percent￿of￿the
outstanding￿shares￿of￿ASML￿during￿any￿six￿month￿period￿(the￿relevant￿percentage￿is￿1.5￿percent￿for￿Samsung￿and￿2.5
percent￿for￿TSMC);￿the￿foregoing￿restriction￿does￿not￿apply￿to￿block￿trades￿or￿underwritten￿offerings.￿There￿are￿also
restrictions￿on￿Intel's￿ability￿to￿transfer￿ASML￿shares￿to￿certain￿competitors￿or￿customers￿of￿ASML.

Termination
The￿Intel￿Shareholder￿Agreement￿will￿terminate￿upon￿the￿occurrence￿of￿the￿following￿events￿(each￿a￿"Shareholder
Agreement￿Termination￿Event")￿(i)￿certain￿change￿of￿control￿transactions￿where￿the￿shareholders￿of￿ASML￿prior￿to￿such
a￿transaction￿are￿no￿longer￿entitled￿to￿exercise￿at￿least￿50￿percent￿of￿the￿votes￿in￿the￿General￿Meeting￿following￿such
transaction,￿(ii)￿in￿the￿event￿of￿a￿delisting￿of￿our￿shares￿listed￿at￿Euronext￿Amsterdam￿or￿delisting￿of￿our￿shares￿listed￿at
NASDAQ￿(except￿for￿certain￿voluntary￿delistings￿from￿NASDAQ),￿(iii)￿the￿winding￿up￿or￿liquidation￿of￿ASML,￿or￿(iv)￿in￿the
event￿that￿all￿Depositary￿Receipts￿are￿exchanged￿for￿ASML￿shares￿and￿Intel￿does￿not￿acquire￿ASML￿shares￿in￿excess￿of
4.99￿percent￿of￿the￿outstanding￿ASML￿shares￿within￿18￿months￿of￿such￿exchange￿(see￿"Standstill;￿Additional￿Purchases"
above).

NRE Funding Agreements
On￿July￿9,￿2012,￿ASML￿and￿Intel￿entered￿into￿two￿NRE￿Funding￿Agreements￿pursuant￿to￿which￿Intel￿has￿agreed￿to
fund￿certain￿of￿ASML’s￿R&D￿costs￿and￿project￿expenditures.￿One￿agreement￿relates￿to￿the￿Intel￿450mm￿NRE￿Funding
Agreement￿and￿the￿other￿relates￿to￿the￿Intel￿EUV￿NRE￿Funding￿Agreement￿(together￿the￿Intel￿NRE￿Funding￿Agreements).
Intel￿has￿committed￿to￿provide￿funding￿in￿an￿aggregate￿amount￿of￿EUR￿553￿million￿under￿the￿Intel￿450mm￿NRE￿Funding
Agreement￿and￿funding￿in￿an￿aggregate￿amount￿of￿EUR￿276￿million￿under￿the￿Intel￿EUV￿NRE￿Funding￿Agreement,
payable￿over￿the￿term￿of￿the￿relevant￿agreements￿(2013-2017).￿Under￿the￿agreements,￿ASML￿retains￿sole￿control￿over
the￿development￿of￿450mm￿photo￿lithography￿equipment￿and￿EUV￿platforms￿and￿will￿own￿all￿intellectual￿property
created￿by￿ASML￿in￿connection￿therewith.￿The￿NRE￿Funding￿Agreements￿provide￿that￿if￿ASML,￿in￿its￿reasonable
discretion,￿determines￿to￿abandon￿either￿the￿450mm￿or￿EUV￿development￿project,￿as￿a￿result￿of￿technical￿infeasibility
or￿lack￿of￿sufficient￿industry￿demand,￿or￿if￿the￿then￿remaining￿funding￿exceeds￿the￿expenditure￿estimate￿for￿the
development￿project￿(450mm￿or￿EUV),￿then￿the￿parties￿may￿agree￿on￿an￿alternative￿development￿project.￿If￿no￿alternative
is￿agreed,￿ASML￿may￿invoice￿Intel￿for￿the￿remaining￿due￿portion￿of￿committed￿funding￿during￿each￿year￿of￿the￿remaining
funding￿period￿in￿which￿ASML's￿actual￿gross￿R&D￿expenditures￿exceed￿a￿minimum￿threshold￿specified￿in￿the￿relevant
Intel￿NRE￿Funding￿Agreement.

The￿NRE￿Funding￿Agreements￿will￿terminate￿on￿December￿31,￿2017￿or￿upon￿pre-payment￿by￿Intel￿of￿the￿aggregate
amount￿of￿funding￿owed￿under￿the￿Intel￿NRE￿Funding￿Agreements.

D. Exchange Controls
There￿are￿currently￿no￿limitations,￿either￿under￿the￿laws￿of￿the￿Netherlands￿or￿in￿the￿Articles￿of￿Association￿of￿ASML,
to￿the￿rights￿of￿non-Dutch￿residents￿to￿hold￿or￿vote￿ordinary￿shares.￿Cash￿distributions,￿if￿any,￿payable￿in￿euros￿on
our￿shares￿listed￿at￿Euronext￿Amsterdam￿may￿be￿officially￿transferred￿by￿a￿bank￿from￿the￿Netherlands￿and￿converted
into￿any￿other￿currency￿without￿being￿subject￿to￿any￿Dutch￿legal￿restrictions.￿However,￿for￿statistical￿purposes,￿such
payments￿and￿transactions￿must￿be￿reported￿by￿ASML￿to￿the￿Dutch￿Central￿Bank.￿Furthermore,￿no￿payments,￿including
dividend￿payments,￿may￿be￿made￿to￿jurisdictions￿subject￿to￿certain￿sanctions,￿adopted￿by￿the￿government￿of￿the
Netherlands,￿implementing￿resolutions￿of￿the￿Security￿Council￿of￿the￿United￿Nations.￿Cash￿distributions,￿if￿any,￿on￿our
shares￿listed￿at￿NASDAQ￿shall￿be￿declared￿in￿euros￿but￿paid￿in￿U.S.￿dollars,￿converted￿at￿the￿rate￿of￿exchange￿at￿the
close￿of￿business￿on￿the￿date￿fixed￿for￿that￿purpose￿by￿the￿BoM￿in￿accordance￿with￿the￿Articles￿of￿Association.

E. Taxation

Dutch Taxation
The￿statements￿below￿represent￿a￿summary￿of￿current￿Dutch￿tax￿laws,￿regulations￿and￿judicial￿interpretations￿thereof.
The￿description￿is￿limited￿to￿the￿material￿tax￿implications￿for￿a￿Non-Resident￿Holder.￿This￿summary￿does￿not￿address
special￿rules￿that￿may￿apply￿to￿special￿classes￿of￿holders￿of￿ordinary￿shares￿and￿should￿not￿be￿read￿as￿extending￿by
implication￿to￿matters￿not￿specifically￿referred￿to￿herein.￿As￿to￿individual￿tax￿consequences,￿each￿investor￿in￿ordinary
shares￿should￿consult￿his￿or￿her￿tax￿counsel.

General
The￿acquisition￿of￿ordinary￿shares￿by￿a￿non-resident￿of￿the￿Netherlands￿should￿not￿be￿treated￿as￿a￿taxable￿event￿for
Dutch￿tax￿purposes.￿The￿income￿consequences￿in￿connection￿with￿owning￿and￿disposing￿of￿our￿ordinary￿shares￿are
discussed￿below.

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Substantial Interest
A￿person￿that,￿(inter￿alia)￿directly￿or￿indirectly,￿and￿either￿independently￿or￿jointly￿with￿his￿partner￿(as￿defined￿in￿the
Dutch￿Personal￿Income￿Tax￿Act￿2001),￿owns￿5.0￿percent￿or￿more￿of￿our￿share￿capital,￿owns￿profit￿participating￿rights
that￿correspond￿to￿at￿least￿5.0￿percent￿of￿the￿annual￿profits￿of￿a￿Dutch￿company￿or￿to￿at￿least￿5.0￿percent￿of￿the
liquidation￿proceeds￿of￿such￿company￿or￿holds￿options￿to￿purchase￿5.0￿percent￿or￿more￿of￿our￿share￿capital,￿is￿deemed
to￿have￿a￿substantial￿interest￿in￿our￿shares,￿or￿our￿options,￿as￿applicable.￿Specific￿rules￿apply￿in￿case￿certain￿family
members￿of￿the￿Non-Resident￿Holder￿hold￿a￿substantial￿interest.￿A￿deemed￿substantial￿interest￿also￿exists￿if￿(part￿of)￿a
substantial￿interest￿has￿been￿disposed￿of,￿or￿is￿deemed￿to￿be￿disposed￿of,￿in￿a￿transaction￿where￿no￿taxable￿gain￿has
been￿recognized.￿Special￿attribution￿rules￿exist￿in￿determining￿the￿presence￿of￿a￿substantial￿interest.

Income Tax Consequences for Individual Non-Resident Holders on Owning and Disposing of the Ordinary Shares
An￿individual￿who￿is￿a￿Non-Resident￿Holder￿will￿not￿be￿subject￿to￿Dutch￿income￿tax￿on￿received￿income￿in￿respect￿of￿our
ordinary￿shares￿or￿capital￿gains￿derived￿from￿the￿sale,￿exchange￿or￿other￿disposition￿of￿our￿ordinary￿shares,￿provided
that￿such￿holder:
• Does￿not￿carry￿on￿and￿has￿not￿carried￿on￿a￿business￿in￿the￿Netherlands￿through￿a￿permanent￿establishment￿or￿a

permanent￿representative￿to￿which￿the￿ordinary￿shares￿are￿attributable;

• Does￿not￿hold￿and￿has￿not￿held￿a￿(deemed)￿substantial￿interest￿in￿our￿share￿capital￿or,￿in￿the￿event￿the￿Non-Resident
Holder￿holds￿or￿has￿held￿a￿(deemed)￿substantial￿interest￿in￿our￿share￿capital,￿such￿interest￿is,￿or￿was,￿a￿business
asset￿in￿the￿hands￿of￿the￿holder;

• Does￿not￿share￿and￿has￿not￿shared￿directly￿(through￿the￿beneficial￿ownership￿of￿ordinary￿shares￿or￿similar￿securities)
in￿the￿profits￿of￿an￿enterprise￿managed￿and￿controlled￿in￿the￿Netherlands￿which￿(is￿deemed￿to)￿own(s),￿or￿(is￿deemed
to￿have)￿has￿owned,￿our￿ordinary￿shares;

• Does￿not￿carry￿out￿and￿has￿not￿carried￿out￿any￿activities￿which￿generate￿taxable￿profit￿or￿taxable￿income￿to￿which￿the

holding￿of￿our￿ordinary￿shares￿was￿connected;￿and
Is￿not￿an￿individual￿that￿has￿elected￿to￿be￿taxed￿as￿a￿resident￿of￿the￿Netherlands.

•

Corporate Income Tax Consequences for Corporate Non-Resident Holders
Income￿derived￿from￿ordinary￿shares￿or￿capital￿gains￿derived￿from￿the￿sale,￿exchange￿or￿disposition￿of￿ordinary￿shares
by￿a￿corporate￿Non-Resident￿Holder￿is￿taxable￿if:
• The￿holder￿carries￿on￿a￿business￿in￿the￿Netherlands￿through￿a￿permanent￿establishment￿or￿a￿permanent￿agent￿in￿the

Netherlands￿(Dutch￿enterprise)￿and￿the￿ordinary￿shares￿are￿attributable￿to￿this￿permanent￿establishment￿or￿permanent
agent,￿unless￿the￿participation￿exemption￿(discussed￿below)￿applies;￿or

• The￿holder￿is￿a￿resident￿of￿Aruba,￿Curacao￿or￿Saint￿Martin￿with￿a￿permanent￿establishment￿or￿permanent

representative￿in￿Bonaire,￿Eustatius￿or￿Saba￿to￿which￿our￿ordinary￿shares￿are￿attributable,￿while￿the￿profits￿of￿such
holder￿are￿taxable￿in￿the￿Netherlands￿pursuant￿to￿article￿17(3)(c)￿of￿the￿Dutch￿Corporate￿Income￿Tax￿Act￿1969;￿or
• The￿holder￿has￿a￿substantial￿interest￿in￿our￿share￿capital,￿which￿is￿held￿with￿the￿primary￿aim￿or￿one￿of￿the￿primary
aims￿to￿evade￿the￿levy￿of￿income￿tax￿or￿dividend￿withholding￿tax￿at￿the￿level￿of￿another￿person￿and￿which￿is￿not
attributable￿to￿his￿enterprise;￿or

• Certain￿assets￿of￿the￿holder￿are￿deemed￿to￿be￿treated￿as￿a￿Dutch￿enterprise￿under￿Dutch￿tax￿law￿and￿the￿ordinary

shares￿are￿attributable￿to￿this￿Dutch￿enterprise.

To￿qualify￿for￿the￿Dutch￿participation￿exemption,￿the￿holder￿must￿generally￿hold￿at￿least￿5.0￿percent￿of￿our￿nominal￿paid-
in￿capital￿and￿meet￿certain￿other￿requirements.

Dividend Withholding Tax
In￿general,￿a￿dividend￿distributed￿by￿us￿in￿respect￿of￿our￿ordinary￿shares￿will￿be￿subject￿to￿a￿withholding￿tax￿imposed￿by
the￿Netherlands￿at￿the￿statutory￿rate￿of￿15.0￿percent.

Dividends￿include:
• Dividends￿in￿cash￿and￿in￿kind;
• Deemed￿and￿constructive￿dividends;
• Consideration￿for￿the￿repurchase￿or￿redemption￿of￿ordinary￿shares￿(including￿a￿purchase￿by￿a￿direct￿or￿indirect￿ASML
subsidiary)￿in￿excess￿of￿qualifying￿average￿paid-in￿capital￿unless￿such￿repurchase￿is￿made￿for￿temporary￿investment
purposes￿or￿is￿exempt￿by￿law;

• Stock￿dividends￿up￿to￿their￿nominal￿value￿(unless￿distributed￿out￿of￿qualifying￿paid-in￿capital);
• Any￿(partial)￿repayment￿of￿paid-in￿capital￿not￿qualifying￿as￿capital￿for￿Dutch￿dividend￿withholding￿tax￿purposes;￿and
• Liquidation￿proceeds￿in￿excess￿of￿qualifying￿average￿paid-in￿capital￿for￿Dutch￿dividend￿withholding￿tax￿purposes.

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A￿reduction￿of￿Dutch￿dividend￿withholding￿tax￿can￿be￿obtained￿if:
• The￿participation￿exemption￿applies￿and￿the￿ordinary￿shares￿are￿attributable￿to￿a￿business￿carried￿out￿in￿the

Netherlands;￿or

• The￿dividends￿are￿distributed￿to￿a￿qualifying￿EU￿corporate￿holder￿satisfying￿the￿conditions￿of￿article￿4(2)￿and￿4(3)￿of

the￿Dutch￿Dividend￿Withholding￿Tax￿Act￿1965;￿or

• The￿rate￿is￿reduced￿by￿a￿tax￿treaty.

A￿Non-Resident￿Holder￿of￿ordinary￿shares￿can￿be￿eligible￿for￿a￿partial￿or￿complete￿exemption￿or￿refund￿of￿all￿or￿a￿portion
of￿the￿above￿withholding￿tax￿under￿a￿tax￿treaty￿that￿is￿in￿effect￿between￿the￿Netherlands￿and￿the￿Non-Resident￿Holder’s
country￿of￿residence.￿The￿Netherlands￿has￿concluded￿such￿treaties￿with￿the￿United￿States,￿Canada,￿Switzerland,￿Japan,
most￿European￿Union￿member￿states,￿as￿well￿as￿many￿other￿countries.￿Under￿the￿treaty,￿dividends￿paid￿by￿us￿to￿a￿Non-
Resident￿Holder￿that￿is￿a￿resident￿of￿the￿United￿States￿as￿defined￿in￿the￿tax￿treaty￿(other￿than￿an￿exempt￿organization
or￿exempt￿pension￿trust,￿as￿discussed￿below)￿are￿generally￿liable￿to￿15.0￿percent￿Dutch￿withholding￿tax￿or,￿in￿the
case￿of￿certain￿United￿States￿corporate￿shareholders￿owning￿at￿least￿10.0￿percent￿of￿our￿voting￿power,￿a￿reduction￿to
5.0￿percent,￿provided￿that￿the￿Holder￿does￿not￿have￿an￿enterprise￿or￿an￿interest￿in￿an￿enterprise￿that￿is,￿in￿whole￿or
in￿part,￿carried￿on￿through￿a￿permanent￿establishment￿or￿permanent￿representative￿in￿the￿Netherlands￿to￿which￿the
dividends￿are￿attributable.￿The￿tax￿treaty￿also￿provides￿for￿a￿dividend￿withholding￿tax￿exemption￿on￿dividends,￿but￿only
for￿a￿shareholders￿owning￿at￿least￿80.0￿percent￿of￿our￿voting￿power￿and￿meeting￿all￿other￿requirements.￿The￿tax￿treaty
provides￿for￿a￿complete￿exemption￿from￿tax￿on￿dividends￿received￿by￿exempt￿pension￿trusts￿and￿exempt￿organizations,
as￿defined￿therein.￿Except￿in￿the￿case￿of￿exempt￿organizations,￿the￿reduced￿dividend￿withholding￿tax￿rate￿(or￿exemption
from￿withholding)￿can￿be￿applied￿at￿the￿source￿upon￿payment￿of￿the￿dividends,￿provided￿that￿the￿proper￿forms￿have
been￿filed￿in￿advance￿of￿the￿payment.￿Exempt￿organizations￿remain￿subject￿to￿the￿statutory￿withholding￿rate￿of￿15.0
percent￿and￿are￿required￿to￿file￿for￿a￿refund￿of￿such￿withholding.
A￿Non-Resident￿Holder￿may￿not￿claim￿the￿benefits￿of￿the￿tax￿treaty￿unless￿(i)￿he/she￿is￿a￿resident￿of￿the￿United￿States
of￿America￿as￿defined￿therein,￿or￿(ii)￿he/she￿is￿deemed￿to￿be￿a￿resident￿on￿the￿basis￿of￿the￿provisions￿of￿article￿24(4)￿of
the￿tax￿treaty,￿and￿(iii)￿his￿or￿her￿entitlement￿to￿those￿benefits￿is￿not￿limited￿by￿the￿provisions￿of￿article￿26￿(limitation￿on
benefits)￿of￿the￿tax￿treaty.

Dividend Stripping Rules
Under￿Dutch￿tax￿legislation￿regarding￿anti-dividend￿stripping,￿no￿exemption￿from,￿or￿refund￿of,￿Dutch￿dividend
withholding￿tax￿is￿granted￿if￿the￿recipient￿of￿dividends￿paid￿by￿us￿is￿not￿considered￿the￿beneficial￿owner￿of￿such
dividends.

Gift or Inheritance Taxes
Dutch￿gift￿or￿inheritance￿taxes￿will￿not￿be￿levied￿on￿the￿transfer￿of￿ordinary￿shares￿by￿way￿of￿gift,￿or￿upon￿the￿death￿of￿a
Non-Resident￿Holder,￿unless:

(1)￿The￿transfer￿is￿construed￿as￿an￿inheritance￿or￿as￿a￿gift￿made￿by￿or￿on￿behalf￿of￿a￿person￿who,￿at￿the￿time￿of￿the￿gift￿or
death,￿is￿deemed￿to￿be,￿resident￿of￿the￿Netherlands;￿or
(2)￿The￿ordinary￿shares￿are￿attributable￿to￿an￿enterprise￿or￿part￿thereof￿that￿is￿carried￿on￿through￿a￿permanent
establishment￿or￿a￿permanent￿representative￿in￿the￿Netherlands.

Gift￿tax￿and￿inheritance￿tax￿are￿levied￿on￿the￿beneficiary.￿For￿purposes￿of￿Dutch￿gift￿and￿inheritance￿tax,￿an￿individual
of￿Dutch￿nationality￿is￿deemed￿to￿be￿a￿resident￿of￿the￿Netherlands￿if￿he￿has￿been￿a￿resident￿thereof￿at￿any￿time￿during
the￿ten￿years￿preceding￿the￿time￿of￿the￿gift￿or￿death.￿For￿purposes￿of￿Dutch￿gift￿tax,￿a￿person￿not￿possessing￿Dutch
nationality￿is￿deemed￿to￿be￿a￿resident￿of￿the￿Netherlands￿if￿he/she￿has￿resided￿therein￿at￿any￿time￿in￿the￿twelve￿months
preceding￿the￿gift.

Value Added Tax
No￿Dutch￿value￿added￿tax￿is￿imposed￿on￿dividends￿in￿respect￿of￿our￿ordinary￿shares￿or￿on￿the￿transfer￿of￿our￿shares.

Residence
A￿Non-Resident￿Holder￿will￿not￿become￿resident,￿or￿be￿deemed￿to￿be￿resident,￿in￿the￿Netherlands￿solely￿as￿a￿result￿of
holding￿our￿ordinary￿shares￿or￿of￿the￿execution,￿performance,￿delivery￿and/or￿enforcement￿of￿rights￿in￿respect￿of￿our
ordinary￿shares.

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United States Taxation
The￿following￿is￿a￿discussion￿of￿the￿material￿United￿States￿federal￿income￿tax￿consequences￿relating￿to￿the￿acquisition,
ownership￿and￿disposition￿of￿Ordinary￿Shares￿by￿a￿United￿States￿Holder￿(as￿defined￿below)￿acting￿in￿the￿capacity￿of￿a
beneficial￿owner￿who￿is￿not￿a￿tax￿resident￿of￿the￿Netherlands.￿This￿discussion￿deals￿only￿with￿Ordinary￿Shares￿held￿as
capital￿assets￿and￿does￿not￿deal￿with￿the￿tax￿consequences￿applicable￿to￿all￿categories￿of￿investors,￿some￿of￿which
(such￿as￿tax-exempt￿entities,￿financial￿institutions,￿regulated￿investment￿companies,￿dealers￿in￿securities/traders￿in
securities￿that￿elect￿a￿mark-to-market￿method￿of￿accounting￿for￿securities￿holdings,￿insurance￿companies,￿investors
owning￿directly,￿indirectly￿or￿constructively￿10.0￿percent￿or￿more￿of￿our￿outstanding￿voting￿shares,￿investors￿who￿hold
Ordinary￿Shares￿as￿part￿of￿hedging￿or￿conversion￿transactions￿and￿investors￿whose￿functional￿currency￿is￿not￿the￿U.S.
dollar)￿may￿be￿subject￿to￿special￿rules.￿In￿addition,￿the￿discussion￿does￿not￿address￿any￿alternative￿minimum￿tax￿or￿any
state,￿local,￿FIRPTA-related￿United￿States￿federal￿income￿tax￿consequences,￿or￿non-United￿States￿tax￿consequences.

This￿discussion￿is￿based￿on￿the￿U.S.-Netherlands￿Income￿tax￿treaty,￿the￿Internal￿Revenue￿Code￿of￿1986,￿as￿amended￿to
the￿date￿hereof,￿final,￿temporary￿and￿proposed￿Treasury￿Department￿regulations￿promulgated,￿and￿administrative￿and
judicial￿interpretations￿thereof,￿changes￿to￿any￿of￿which￿subsequent￿to￿the￿date￿hereof,￿possibly￿with￿retroactive￿effect,
may￿affect￿the￿tax￿consequences￿described￿herein.￿In￿addition,￿there￿can￿be￿no￿assurance￿that￿the￿IRS￿will￿not￿challenge
one￿or￿more￿of￿the￿tax￿consequences￿described￿herein,￿and￿we￿have￿not￿obtained,￿nor￿do￿we￿intend￿to￿obtain,￿a￿ruling
from￿the￿IRS￿or￿an￿opinion￿of￿counsel￿with￿respect￿to￿the￿United￿States￿federal￿income￿tax￿consequences￿of￿acquiring￿or
holding￿shares.￿Prospective￿purchasers￿of￿Ordinary￿Shares￿are￿advised￿to￿consult￿their￿tax￿advisers￿with￿respect￿to￿their
particular￿circumstances￿and￿with￿respect￿to￿the￿effects￿of￿United￿States￿federal,￿state,￿local￿or￿non-United￿States￿tax
laws￿to￿which￿they￿may￿be￿subject.

As￿used￿herein,￿the￿term￿‘United￿States￿Holder’￿means￿a￿beneficial￿owner￿of￿Ordinary￿Shares￿for￿United￿States￿federal
income￿tax￿purposes￿whose￿holding￿of￿such￿Ordinary￿Shares￿does￿not￿form￿part￿of￿the￿business￿property￿or￿assets￿of￿a
permanent￿establishment￿or￿fixed￿base￿in￿the￿Netherlands;￿who￿is￿fully￿entitled￿to￿the￿benefits￿of￿the￿treaty￿in￿respect￿of
such￿Ordinary￿Shares;￿and￿is:
• An￿individual￿citizen￿or￿tax￿resident￿of￿the￿United￿States;￿or
• A￿corporation￿or￿other￿entity￿treated￿as￿a￿corporation￿for￿United￿States￿federal￿income￿tax￿purposes￿created￿or

organized￿in￿or￿under￿the￿laws￿of￿the￿United￿States￿or￿of￿any￿political￿subdivision￿thereof;￿or

• An￿estate￿of￿which￿the￿income￿is￿subject￿to￿United￿States￿federal￿income￿taxation￿regardless￿of￿its￿source;￿or
• A￿trust￿whose￿administration￿is￿subject￿to￿the￿primary￿supervision￿of￿a￿court￿within￿the￿United￿States￿and￿which￿has

one￿or￿more￿United￿States￿persons￿who￿have￿the￿authority￿to￿control￿all￿of￿its￿substantial￿decisions.

If￿an￿entity￿treated￿as￿a￿partnership￿for￿United￿States￿federal￿income￿tax￿purposes￿owns￿ordinary￿shares,￿the￿United
States￿federal￿income￿tax￿treatment￿of￿a￿partner￿in￿such￿partnership￿will￿generally￿depend￿upon￿the￿status￿and￿tax
residency￿of￿the￿partner￿and￿the￿activities￿of￿the￿partnership.￿A￿partnership￿that￿owns￿Ordinary￿Shares￿and￿the￿partners
in￿such￿partnership￿should￿consult￿their￿tax￿advisors￿about￿the￿United￿States￿federal￿income￿tax￿consequences￿of
holding￿and￿disposing￿of￿the￿ordinary￿Shares.

Passive Foreign Investment Company Considerations
We￿believe￿we￿were￿not￿a￿PFIC￿for￿US￿federal￿income￿tax￿purposes￿in￿2014￿and￿that￿we￿will￿not￿be￿a￿PFIC￿in￿2015.
However,￿as￿PFIC￿status￿is￿a￿factual￿matter￿that￿must￿be￿determined￿annually￿at￿the￿close￿of￿each￿taxable￿year,￿there
can￿be￿no￿certainty￿as￿to￿our￿actual￿PFIC￿status￿in￿any￿particular￿year￿until￿the￿close￿of￿the￿taxable￿year￿in￿question.
We￿have￿not￿conducted￿a￿detailed￿study￿at￿this￿time￿to￿confirm￿our￿non-PFIC￿status.￿If￿we￿were￿treated￿as￿a￿PFIC￿in
any￿year￿during￿which￿a￿United￿States￿Holder￿owned￿common￿shares,￿certain￿adverse￿tax￿consequences￿could￿apply.
Investors￿should￿consult￿their￿tax￿advisors￿with￿respect￿to￿any￿PFIC￿considerations.

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Taxation of Dividends
United￿States￿Holders￿should￿generally￿include￿in￿gross￿income,￿as￿foreign-source￿dividend￿income￿the￿gross￿amount
of￿any￿non-liquidating￿distribution￿(before￿reduction￿for￿Dutch￿withholding￿taxes)￿we￿make￿out￿of￿our￿current￿or
accumulated￿earnings￿and￿profits￿(as￿determined￿for￿United￿States￿federal￿income￿tax￿purposes)￿when￿the￿distribution
is￿actually￿or￿constructively￿received￿by￿the￿United￿States￿Holder.￿Distributions￿will￿not￿be￿eligible￿for￿the￿dividends-
received￿deduction￿generally￿allowed￿to￿United￿States￿corporations￿in￿respect￿of￿dividends￿received￿from￿other￿United
States￿corporations.￿The￿amount￿of￿the￿dividend￿distribution￿includible￿in￿income￿of￿a￿United￿States￿Holder￿should￿be
the￿U.S.￿dollar￿value￿of￿the￿foreign￿currency￿(e.g.￿euros)￿paid,￿determined￿by￿the￿spot￿rate￿of￿exchange￿on￿the￿date￿of￿the
distribution,￿regardless￿of￿whether￿the￿payment￿is￿in￿fact￿converted￿into￿U.S.￿dollars.￿Distributions￿in￿excess￿of￿current
and￿accumulated￿earnings￿and￿profits,￿as￿determined￿for￿United￿States￿federal￿income￿tax￿purposes,￿will￿be￿treated
as￿a￿non-taxable￿return￿of￿capital￿to￿the￿extent￿of￿the￿United￿States￿Holder’s￿US￿tax￿basis￿in￿the￿Ordinary￿Shares￿and
thereafter￿as￿taxable￿capital￿gain.￿We￿presently￿do￿not￿maintain￿calculations￿of￿our￿earnings￿and￿profits￿under￿United
States￿federal￿income￿tax￿principles.￿If￿we￿do￿not￿report￿to￿a￿United￿States￿Holder￿the￿portion￿of￿a￿distribution￿that
exceeds￿earnings￿and￿profits,￿the￿distribution￿will￿generally￿be￿taxable￿as￿a￿dividend￿even￿if￿that￿distribution￿would
otherwise￿be￿treated￿as￿a￿non-taxable￿return￿of￿capital￿or￿as￿capital￿gain￿under￿the￿rules￿described￿above.

Subject￿to￿limitations￿provided￿in￿the￿United￿States￿Internal￿Revenue￿Code,￿a￿United￿States￿Holder￿may￿generally
deduct￿from￿its￿United￿States￿federal￿taxable￿income,￿or￿credit￿against￿its￿United￿States￿federal￿income￿tax￿liability,
the￿amount￿of￿qualified￿Dutch￿withholding￿taxes.￿However,￿Dutch￿withholding￿tax￿may￿be￿credited￿only￿if￿the￿United
States￿Holder￿does￿not￿claim￿a￿deduction￿for￿any￿Dutch￿or￿other￿non-United￿States￿taxes￿paid￿or￿accrued￿in￿that￿year.
In￿addition,￿Dutch￿dividend￿withholding￿taxes￿will￿likely￿not￿be￿creditable￿against￿the￿United￿States￿Holder’s￿United
States￿tax￿liability￿to￿the￿extent￿we￿are￿not￿required￿to￿pay￿over￿the￿amount￿withheld￿to￿the￿Dutch￿Tax￿Administration.
Currently,￿a￿Dutch￿corporation￿that￿receives￿dividends￿from￿qualifying￿non-Dutch￿subsidiaries￿may￿credit￿source￿country
tax￿withheld￿from￿those￿dividends￿against￿Dutch￿withholding￿tax￿imposed￿on￿a￿dividend￿paid￿by￿a￿Dutch￿corporation,￿up
to￿a￿maximum￿of￿3.0￿percent￿of￿the￿dividend￿paid￿by￿the￿Dutch￿corporation.￿The￿credit￿reduces￿the￿amount￿of￿dividend
withholding￿that￿we￿are￿required￿to￿pay￿to￿the￿Dutch￿Tax￿Administration￿but￿does￿not￿reduce￿the￿amount￿of￿tax￿we￿are
required￿to￿withhold￿from￿dividends.￿￿

For￿US￿foreign￿tax￿credit￿purposes,￿dividends￿paid￿by￿us￿generally￿will￿be￿treated￿as￿foreign-source￿income￿and￿as
‘passive￿category￿income’￿(or￿in￿the￿case￿of￿certain￿holders,￿as￿‘general￿category￿income’).￿Gains￿or￿losses￿realized￿by￿a
United￿States￿Holder￿on￿the￿sale￿or￿exchange￿of￿Ordinary￿Shares￿generally￿will￿be￿treated￿as￿US-source￿gain￿or￿loss.￿The
rules￿governing￿the￿foreign￿tax￿credit￿are￿complex￿and￿we￿suggest￿that￿each￿United￿States￿Holder￿consult￿his￿or￿her￿own
tax￿advisor￿to￿determine￿whether,￿and￿to￿what￿extent,￿a￿foreign￿tax￿credit￿will￿be￿available.

Dividends￿received￿by￿a￿United￿States￿Holder￿will￿generally￿be￿taxed￿at￿ordinary￿income￿tax￿rates.￿However,￿the￿Jobs
and￿Growth￿Tax￿Relief￿Reconciliation￿Act￿of￿2003,￿as￿amended￿by￿the￿Working￿Families￿Tax￿Relief￿Act￿of￿2004,￿the
American￿Jobs￿Creation￿Act￿of￿2004,￿and￿the￿American￿Taxpayer￿Relief￿Act￿of￿2012,￿reduces￿to￿20.0￿percent￿the
maximum￿tax￿rate￿for￿certain￿dividends￿received￿by￿individuals,￿so￿long￿as￿certain￿exclusions￿do￿not￿apply￿and￿the￿stock
has￿been￿held￿for￿at￿least￿60￿days￿during￿the￿121-day￿period￿beginning￿60￿days￿before￿the￿ex-dividend￿date.￿Dividends
received￿from￿‘qualified￿foreign￿corporations’￿generally￿qualify￿for￿the￿reduced￿rate.￿A￿non-United￿States￿corporation
(other￿than￿a￿PFIC)￿generally￿will￿be￿considered￿to￿be￿a￿qualified￿foreign￿corporation￿if:￿(i)￿the￿shares￿of￿the￿non-United
States￿corporation￿are￿readily￿tradable￿on￿an￿established￿securities￿market￿in￿the￿United￿States￿or￿(ii)￿the￿non-United
States￿corporation￿is￿eligible￿for￿the￿benefits￿of￿a￿comprehensive￿income￿tax￿treaty￿with￿the￿United￿States￿that￿has￿been
identified￿as￿a￿qualifying￿treaty￿and￿contains￿an￿exchange￿of￿information￿program.￿Individual￿United￿States￿Holders
should￿consult￿their￿tax￿advisors￿regarding￿the￿impact￿of￿this￿provision￿on￿their￿particular￿situations.

Dividends￿paid￿by￿us￿generally￿will￿constitute￿‘portfolio￿income’￿for￿purposes￿of￿the￿limitations￿on￿the￿use￿of￿passive
activity￿losses￿(and,￿therefore,￿generally￿may￿not￿be￿offset￿by￿passive￿activity￿losses)￿and￿as￿‘investment￿income’￿for
purposes￿of￿the￿limitation￿on￿the￿deduction￿of￿investment￿interest￿expense.

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Taxation on Sale or Other Disposition of Ordinary Shares
Upon￿a￿sale￿or￿other￿disposition￿of￿Ordinary￿Shares,￿a￿United￿States￿Holder￿will￿generally￿recognize￿capital￿gain￿or￿loss
for￿United￿States￿federal￿income￿tax￿purposes￿in￿an￿amount￿equal￿to￿the￿difference￿between￿the￿amount￿realized,￿if￿paid
in￿US￿dollars,￿or￿the￿U.S.￿dollar￿value￿of￿the￿amount￿realized￿(determined￿at￿the￿spot￿rate￿on￿the￿settlement￿date￿of￿the
sale)￿if￿proceeds￿are￿paid￿in￿currency￿other￿than￿the￿U.S.￿dollar,￿as￿the￿case￿may￿be,￿and￿the￿United￿States￿Holder’s￿US
tax￿basis￿(determined￿in￿U.S.￿dollars)￿in￿such￿Ordinary￿Shares.￿Generally,￿the￿capital￿gain￿or￿loss￿will￿be￿long-term￿capital
gain￿or￿loss￿if￿the￿holding￿period￿of￿the￿United￿States￿Holder￿in￿the￿Ordinary￿Shares￿exceeds￿one￿year￿at￿the￿time￿of￿the
sale￿or￿other￿disposition.￿The￿deductibility￿of￿capital￿losses￿is￿subject￿to￿limitations￿for￿United￿States￿federal￿income￿tax
purposes.￿Gain￿or￿loss￿from￿the￿sale￿or￿other￿disposition￿of￿Ordinary￿Shares￿generally￿will￿be￿treated￿as￿United￿States
source￿income￿or￿loss￿for￿United￿States￿foreign￿tax￿credit￿purposes.￿Generally,￿any￿gain￿or￿loss￿resulting￿from￿currency
fluctuations￿during￿the￿period￿between￿the￿date￿of￿the￿sale￿of￿the￿Ordinary￿Shares￿and￿the￿date￿the￿sale￿proceeds￿are
converted￿into￿U.S.￿dollars￿will￿be￿treated￿as￿ordinary￿income￿or￿loss￿from￿sources￿within￿the￿United￿States.￿Each￿United
States￿Holder￿should￿consult￿his￿or￿her￿tax￿advisor￿with￿regard￿to￿the￿translation￿rules￿applicable￿when￿computing￿its
adjusted￿US￿tax￿basis￿and￿the￿amount￿realized￿upon￿a￿sale￿or￿other￿disposition￿of￿its￿Ordinary￿Shares￿if￿purchased￿in,￿or
sold￿or￿disposed￿of￿for,￿a￿currency￿other￿than￿U.S.￿dollar.

Information Reporting and Backup Withholding
Information￿returns￿may￿be￿filed￿with￿the￿IRS￿in￿connection￿with￿payments￿on￿the￿Ordinary￿Shares￿or￿proceeds￿from￿a
sale,￿redemption￿or￿other￿disposition￿of￿the￿Ordinary￿Shares.￿A￿‘backup￿withholding’￿tax￿may￿be￿applied￿to,￿and￿withheld
from,￿these￿payments￿if￿the￿beneficial￿owner￿fails￿to￿provide￿a￿correct￿taxpayer￿identification￿number￿to￿the￿paying￿agent
and￿to￿comply￿with￿certain￿certification￿procedures￿or￿otherwise￿establish￿an￿exemption￿from￿backup￿withholding.￿Any
amounts￿withheld￿under￿the￿backup￿withholding￿rules￿might￿be￿refunded￿(or￿credited￿against￿the￿beneficial￿owner’s
United￿States￿federal￿income￿tax￿liability,￿if￿any)￿depending￿on￿the￿facts￿and￿provided￿that￿the￿required￿information￿is
furnished￿to￿the￿IRS.

The￿discussion￿set￿out￿above￿is￿included￿for￿general￿information￿only￿and￿may￿not￿be￿applicable￿depending￿upon￿a
holder’s￿particular￿situation.￿Holders￿should￿consult￿their￿tax￿advisors￿with￿respect￿to￿the￿tax￿consequences￿to￿them￿of
the￿purchase,￿ownership￿and￿disposition￿of￿shares￿including￿the￿tax￿consequences￿under￿state,￿local￿and￿other￿tax￿laws
and￿the￿possible￿effects￿of￿changes￿in￿United￿States￿federal￿and￿other￿tax￿laws.

F. Dividends and Paying Agents
Not￿applicable.

G. Statement by Experts
Not￿applicable.

H. Documents on Display
We￿are￿subject￿to￿certain￿reporting￿requirements￿of￿the￿Exchange￿Act.￿As￿a￿"foreign￿private￿issuer",￿we￿are￿exempt￿from
the￿rules￿under￿the￿Exchange￿Act￿prescribing￿certain￿disclosure￿and￿procedural￿requirements￿for￿proxy￿solicitations,
and￿our￿officers,￿directors￿and￿principal￿shareholders￿are￿exempt￿from￿the￿reporting￿and￿"short-swing"￿profit￿recovery
provisions￿contained￿in￿Section￿16￿of￿the￿Exchange￿Act,￿with￿respect￿to￿their￿purchases￿and￿sales￿of￿shares.￿In￿addition,
we￿are￿not￿required￿to￿file￿reports￿and￿Financial￿Statements￿with￿the￿SEC￿as￿frequently￿or￿as￿promptly￿as￿companies
that￿are￿not￿foreign￿private￿issuers￿whose￿securities￿are￿registered￿under￿the￿Exchange￿Act.￿However,￿we￿are￿required
to￿file￿with￿the￿SEC,￿within￿four￿months￿after￿the￿end￿of￿each￿fiscal￿year,￿an￿Annual￿Report￿on￿Form￿20-F￿containing
Financial￿Statements￿audited￿by￿an￿independent￿accounting￿firm￿and￿interactive￿data￿comprising￿Financial￿Statements￿in
extensible￿business￿reporting￿language.￿We￿publish￿unaudited￿interim￿financial￿information￿after￿the￿end￿of￿each￿quarter.
We￿furnish￿this￿quarterly￿financial￿information￿to￿the￿SEC￿under￿cover￿of￿a￿Form￿6-K.

Documents￿we￿file￿with￿the￿SEC￿are￿publicly￿available￿at￿its￿public￿reference￿room￿at￿100￿F￿Street,￿N.E.,￿Washington,
DC￿20549,￿United￿States.￿The￿SEC￿also￿maintains￿a￿Website￿that￿contains￿reports￿and￿other￿information￿regarding
registrants￿that￿are￿required￿to￿file￿electronically￿with￿the￿SEC.￿The￿address￿of￿this￿Website￿is￿http://www.sec.gov.￿Please
call￿the￿SEC￿at￿1-800-SEC-0330￿for￿further￿information￿on￿the￿operation￿of￿the￿public￿reference￿facilities.

I. Subsidiary Information
See￿Item￿4.C.￿"Organizational￿Structure".

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Item 11 Quantitative and Qualitative Disclosures About Market Risk

We￿are￿exposed￿to￿certain￿financial￿risks￿such￿as￿market￿risk￿(including￿foreign￿currency￿exchange￿risk￿and￿interest￿rate
risk),￿credit￿risk,￿liquidity￿risk￿and￿capital￿risk.￿Our￿overall￿risk￿management￿program￿focuses￿on￿the￿unpredictability
of￿financial￿markets￿and￿seeks￿to￿minimize￿potentially￿adverse￿effects￿on￿our￿financial￿condition￿and￿results￿from
operations.￿We￿use￿derivative￿financial￿instruments￿to￿hedge￿certain￿risk￿exposures.￿None￿of￿our￿transactions￿are
entered￿into￿for￿trading￿or￿speculative￿purposes.￿We￿believe￿that￿market￿information￿is￿the￿most￿reliable￿and￿transparent
measure￿for￿our￿derivative￿financial￿instruments￿that￿are￿measured￿at￿fair￿value.￿To￿mitigate￿the￿risk￿that￿any￿of￿our
counterparties￿in￿hedging￿transactions￿is￿unable￿to￿meet￿its￿obligations,￿we￿only￿enter￿into￿transactions￿with￿a￿limited
number￿of￿major￿financial￿institutions￿that￿have￿good￿credit￿ratings￿and￿closely￿monitor￿the￿creditworthiness￿of￿our
counterparties.￿Concentration￿risk￿is￿mitigated￿by￿limiting￿the￿exposure￿to￿a￿single￿counterparty.￿Our￿risk￿management
program￿focuses￿appropriately￿on￿the￿current￿environment￿of￿uncertainty￿in￿the￿financial￿markets,￿especially￿in￿the￿euro-
zone.

Foreign￿Currency￿Risk￿Management
Our￿sales￿are￿predominately￿denominated￿in￿euros.￿Exceptions￿may￿occur￿on￿a￿customer￿by￿customer￿basis.￿Our￿cost
of￿sales￿and￿other￿expenses￿are￿mainly￿denominated￿in￿euros,￿to￿a￿certain￿extent￿in￿U.S.￿dollars,￿Taiwanese￿dollars￿and
Japanese￿yen￿and￿to￿a￿limited￿extent￿in￿other￿currencies.￿Therefore,￿we￿are￿exposed￿to￿foreign￿currency￿exchange￿risks.

It￿is￿our￿policy￿to￿hedge￿material￿transaction￿exposures,￿such￿as￿forecasted￿sales￿and￿purchase￿transactions,￿and
material￿net￿remeasurement￿exposures,￿such￿as￿accounts￿receivable￿and￿payable.￿We￿hedge￿these￿exposures￿through
the￿use￿of￿foreign￿exchange￿contracts.￿In￿line￿with￿our￿overall￿risk￿management￿program￿we￿do￿not￿hedge￿currency
translation￿exposures￿resulting￿from￿net￿equity￿investments￿in￿foreign￿subsidiaries.

Details￿of￿the￿forward￿foreign￿exchange￿contracts￿and￿hedging￿activities￿are￿included￿in￿Note￿4￿to￿the￿Financial
Statements.

Interest￿Rate￿Risk￿Management
We￿have￿interest-bearing￿assets￿and￿liabilities￿that￿expose￿us￿to￿fluctuations￿in￿market￿interest￿rates.￿We￿use￿interest
rate￿swaps￿to￿align￿the￿interest-typical￿terms￿of￿interest-bearing￿liabilities￿with￿the￿interest-typical￿terms￿of￿interest-
bearing￿assets.￿There￿may￿be￿residual￿interest￿rate￿risk￿to￿the￿extent￿the￿asset￿and￿liability￿positions￿do￿not￿fully￿offset.

As￿part￿of￿our￿hedging￿policy,￿we￿use￿interest￿rate￿swaps￿to￿hedge￿changes￿in￿fair￿value￿of￿our￿Eurobonds￿due￿to
changes￿in￿market￿interest￿rates,￿thereby￿offsetting￿the￿variability￿of￿future￿interest￿receipts￿on￿part￿of￿our￿cash￿and￿cash
equivalents.

Furthermore,￿as￿part￿of￿our￿hedging￿policy,￿we￿use￿interest￿rate￿swaps￿to￿hedge￿the￿variability￿of￿future￿interest￿cash
flows￿relating￿to￿certain￿of￿our￿operating￿lease￿obligations.

Details￿of￿the￿interest￿rate￿swaps￿and￿hedging￿activities￿are￿included￿in￿Note￿4￿to￿the￿Financial￿Statements.

Financial￿Instruments
We￿use￿foreign￿exchange￿contracts￿to￿manage￿our￿foreign￿currency￿risk￿and￿interest￿rate￿swaps￿to￿manage￿our￿interest
rate￿risk.￿The￿following￿table￿summarizes￿the￿notional￿amounts￿and￿estimated￿fair￿values￿of￿our￿derivative￿financial
instruments:

(in thousands)
Forward￿foreign￿exchange￿contracts
Interest￿rate￿swaps

As of December 31 Notional amount
EUR
1,219,894
1,013,053

Fair Value Notional amount
EUR
986,986
1,013,053

EUR
(52,319)
138,367

Fair Value
EUR
8,583
51,385

2014

2013

The￿valuation￿technique￿used￿to￿determine￿the￿fair￿value￿of￿forward￿foreign￿exchange￿contracts￿(used￿for￿hedging
purposes)￿approximates￿the￿Net￿Present￿Value￿technique,￿which￿is￿the￿estimated￿amount￿that￿a￿bank￿would￿receive￿or
pay￿to￿terminate￿the￿forward￿foreign￿exchange￿contracts￿at￿the￿reporting￿date,￿taking￿into￿account￿current￿interest￿rates
and￿current￿exchange￿rates.

The￿valuation￿technique￿used￿to￿determine￿the￿fair￿value￿of￿interest￿rate￿swaps￿(used￿for￿hedging￿purposes)￿is￿the
Net￿Present￿Value￿technique,￿which￿is￿the￿estimated￿amount￿that￿a￿bank￿would￿receive￿or￿pay￿to￿terminate￿the￿swap
agreements￿at￿the￿reporting￿date,￿taking￿into￿account￿current￿interest￿rates.

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Sensitivity￿Analysis￿Financial￿Instruments
Foreign Currency Sensitivity
We￿are￿mainly￿exposed￿to￿fluctuations￿in￿exchange￿rates￿between￿the￿euro￿and￿the￿U.S.￿dollar,￿the￿euro￿and￿Taiwanese
dollar￿and￿the￿euro￿and￿the￿Japanese￿yen.￿The￿following￿table￿details￿our￿sensitivity￿to￿a￿10.0￿percent￿strengthening
of￿foreign￿currencies￿against￿the￿euro.￿The￿sensitivity￿analysis￿includes￿foreign￿currency￿denominated￿monetary￿items
outstanding￿and￿adjusts￿their￿translation￿at￿the￿period￿end￿for￿a￿10.0￿percent￿strengthening￿in￿foreign￿currency￿rates.￿A
positive￿amount￿indicates￿an￿increase￿in￿income￿before￿income￿taxes￿or￿OCI,￿as￿shown.

2014

2013

(in thousands)
U.S.￿dollar
Japanese￿yen
Taiwanese￿dollar
Other￿currencies
Total

Impact on income
before income taxes
EUR
3,347
1,516
(2,929)
(2,183)
(249)

Impact on OCI

EUR
15,913
(10,002)
-
-
5,911

Impact on income
before income taxes
EUR
(15,801)
183
(7,692)
(9,281)
(32,591)

Impact on OCI

EUR
21,059
913
-
-
21,972

It￿is￿our￿policy￿to￿limit￿the￿effects￿of￿currency￿exchange￿rate￿fluctuations￿on￿our￿Consolidated￿Statements￿of￿Operations.
The￿decreased￿effect￿on￿income￿before￿income￿taxes￿in￿2014￿compared￿with￿2013￿reflects￿our￿lower￿net￿exposure￿at
year￿end￿2014.￿The￿negative￿effect￿on￿income￿before￿income￿taxes￿as￿presented￿in￿the￿table￿above￿for￿2014￿is￿mainly
attributable￿to￿timing￿differences￿between￿the￿arising￿and￿hedging￿of￿exposures.

The￿effects￿of￿the￿fair￿value￿movements￿of￿cash￿flow￿hedges,￿entered￿into￿for￿U.S.￿dollar￿and￿Japanese￿yen￿transactions
are￿recognized￿in￿OCI.￿The￿U.S.￿dollar￿and￿Japanese￿yen￿effect￿on￿OCI￿in￿2014￿compared￿with￿2013￿is￿the￿result￿of￿an
decrease￿in￿outstanding￿purchase￿hedges￿and￿increase￿in￿outstanding￿sales￿hedges.

For￿a￿10.0￿percent￿weakening￿of￿the￿foreign￿currencies￿against￿the￿euro,￿there￿would￿be￿approximately￿an￿equal￿but
opposite￿effect￿on￿the￿income￿before￿income￿taxes￿and￿OCI.

Interest Rate Sensitivity
The￿sensitivity￿analysis￿below￿has￿been￿determined￿based￿on￿the￿exposure￿to￿interest￿rates￿for￿both￿derivative￿financial
and￿non-derivative￿financial￿instruments￿at￿the￿balance￿sheet￿date￿with￿the￿stipulated￿change￿taking￿place￿at￿the
beginning￿of￿the￿financial￿year￿and￿held￿constant￿throughout￿the￿reporting￿period.￿The￿table￿below￿shows￿the￿effect￿of￿a
1.0￿percentage￿point￿increase￿in￿interest￿rates￿on￿our￿income￿before￿income￿taxes￿and￿OCI.￿A￿positive￿amount￿indicates
an￿increase￿in￿income￿before￿income￿taxes￿and￿OCI.

(in thousands)
Effect￿of￿a￿1.0￿percent￿point￿increase￿in￿interest￿rates

2014

2013

Impact on income
before income
taxes
EUR
17,956

Impact on OCI

EUR
941

Impact on income
before income
taxes
EUR
19,969

Impact on OCI

EUR
1,183

The￿positive￿effect￿on￿income￿before￿income￿taxes￿mainly￿relates￿to￿our￿cash￿and￿cash￿equivalents￿and￿short-term
investments.￿The￿positive￿effect￿on￿OCI,￿is￿mainly￿attributable￿to￿the￿fair￿value￿movements￿of￿the￿interest￿rate￿swaps
designated￿as￿cash￿flow￿hedges.

For￿a￿1.0￿percentage￿point￿decrease￿in￿interest￿rates￿there￿would￿be￿a￿lower￿opposite￿effect￿on￿income￿before￿income
taxes￿and￿OCI￿.

See￿notes￿4￿and￿5￿to￿our￿Financial￿Statements￿for￿more￿information￿on￿our￿Financial￿Risk￿Management￿including￿Credit
Risk￿Management.

Item 12 Description of Securities Other Than Equity Securities

Not￿applicable.

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Part II

Item 13 Defaults, Dividend Arrearages and Delinquencies

None.

Item 14 Material Modifications to the Rights of Security Holders and Use of Proceeds

None.

Item 15 Controls and Procedures

Disclosure Controls and Procedures
As￿of￿December￿31,￿2014,￿ASML's￿senior￿management￿conducted￿an￿evaluation,￿under￿the￿supervision￿and￿with￿the
participation￿of￿ASML’s￿CEO￿and￿CFO,￿of￿the￿effectiveness￿of￿the￿design￿and￿operation￿of￿ASML’s￿disclosure￿controls
and￿procedures￿(as￿defined￿in￿Rule￿13a-15(e)￿under￿the￿Exchange￿Act).￿Based￿on￿such￿evaluation,￿ASML’s￿CEO￿and￿CFO
have￿concluded￿that,￿as￿of￿December￿31,￿2014,￿ASML’s￿disclosure￿controls￿and￿procedures￿are￿effective￿in￿recording,
processing,￿summarizing￿and￿reporting,￿on￿a￿timely￿basis,￿information￿required￿to￿be￿disclosed￿by￿ASML￿in￿the￿reports
that￿it￿files￿or￿submits￿under￿the￿Exchange￿Act￿and￿are￿effective￿in￿ensuring￿that￿information￿required￿to￿be￿disclosed￿by
ASML￿is￿accumulated￿and￿communicated￿to￿ASML’s￿management,￿including￿ASML’s￿CEO￿and￿CFO,￿as￿appropriate￿to
allow￿timely￿decisions￿regarding￿required￿disclosure.

Management's Report on Internal Control over Financial Reporting
ASML’s￿management￿is￿responsible￿for￿establishing￿and￿maintaining￿adequate￿internal￿control￿over￿financial￿reporting,
as￿defined￿in￿Rule￿13a-15(f)￿under￿the￿Exchange￿Act.￿Under￿the￿supervision￿and￿with￿the￿participation￿of￿ASML’s￿CEO
and￿CFO,￿ASML’s￿management￿conducted￿an￿evaluation￿of￿the￿effectiveness￿of￿ASML’s￿internal￿control￿over￿financial
reporting￿as￿of￿December￿31,￿2014￿based￿upon￿the￿framework￿in￿"Internal￿Control￿–￿Integrated￿Framework"￿(2013)
issued￿by￿the￿Committee￿of￿Sponsoring￿Organizations￿of￿the￿Treadway￿Commission.￿Based￿on￿that￿evaluation,
management￿has￿concluded￿that￿ASML’s￿internal￿control￿over￿financial￿reporting￿was￿effective￿as￿of￿December￿31,￿2014
at￿providing￿reasonable￿assurance￿regarding￿the￿reliability￿of￿financial￿reporting￿and￿the￿preparation￿of￿the￿Financial
Statements￿for￿external￿purposes￿in￿conformity￿with￿US￿GAAP.

Deloitte￿Accountants￿B.V.,￿an￿independent￿registered￿public￿accounting￿firm,￿has￿audited￿the￿Financial￿Statements
included￿in￿Item￿18￿"Financial￿Statements"￿and,￿as￿part￿of￿the￿audit,￿has￿issued￿a￿report,￿included￿herein,￿on￿the
effectiveness￿of￿ASML’s￿internal￿control￿over￿financial￿reporting.

Changes in Internal Control over Financial Reporting
We￿adopted￿"Internal￿Control￿–￿Integrated￿Framework"￿(2013)￿issued￿by￿the￿Committee￿of￿Sponsoring￿Organizations
of￿the￿Treadway￿Commission￿as￿of￿January￿1,￿2014.￿This￿adoption￿did￿not￿materially￿affect￿our￿internal￿control￿over
financial￿reporting.￿In￿addition,￿during￿the￿year￿ended￿December￿31,￿2014,￿there￿have￿been￿no￿changes￿in￿our￿internal
control￿over￿financial￿reporting￿that￿have￿materially￿affected,￿or￿are￿reasonably￿likely￿to￿materially￿affect,￿our￿internal
control￿over￿financial￿reporting.

Inherent Limitations of Disclosure Controls and Procedures in Internal Control over Financial Reporting
It￿should￿be￿noted￿that￿any￿system￿of￿controls,￿however￿well-designed￿and￿operated,￿can￿provide￿only￿reasonable,￿and
not￿absolute,￿assurance￿that￿the￿objectives￿of￿the￿system￿will￿be￿met.￿In￿addition,￿the￿design￿of￿any￿control￿system￿is
based￿in￿part￿upon￿certain￿assumptions￿about￿the￿likelihood￿of￿future￿events.

ASML￿ANNUAL￿REPORT￿2014

57

Item 16   

A. Audit Committee Financial Expert
Our￿Supervisory￿Board￿has￿determined￿that￿effective￿March￿18,￿2004,￿Mr.￿Fröhlich,￿an￿independent￿member￿of￿the
Supervisory￿Board,￿qualifies￿as￿the￿Audit￿Committee￿Financial￿Expert.￿See￿also￿Item￿6.A.￿"Directors￿and￿Senior
Management"￿and￿Item￿6.C.￿"Board￿Practices".

B. Code of Ethics
ASML￿fosters￿a￿culture￿of￿integrity￿where￿people￿comply￿with￿the￿law￿and￿with￿our￿Code￿of￿Conduct￿and￿Business
Principles.￿We￿promote￿an￿open￿and￿honest￿culture￿that￿encourages￿people￿to￿speak￿up￿about￿irregularities￿and￿where
senior￿management￿set￿the￿right￿example.

Code of Conduct
Our￿Code￿of￿Conduct￿describes￿what￿ASML￿stands￿for￿and￿believes￿in:
• We￿respect￿people;
• We￿respect￿our￿planet;
• We￿operate￿with￿business￿and￿personal￿integrity;￿and
• We￿manage￿professionally.

The￿Code￿of￿Conduct￿can￿be￿found￿on￿the￿corporate￿governance￿section￿of￿ASML's￿Website.

Business Principles
The￿Code￿of￿Conduct￿has￿been￿translated￿into￿a￿set￿of￿practical￿Business￿Principles￿for￿all￿employees.￿The￿Business
Principles￿help￿to￿drive￿ethical￿and￿balance￿behavior,￿control￿our￿business￿exposures,￿and￿safeguard￿our￿reputation.
Employees￿must￿consult￿the￿business￿principles￿for￿their￿day-to-day￿guidance.￿The￿Business￿Principles￿focus￿on￿five
areas:
1. Show￿respect￿for￿People￿and￿Planet;
2. Operate￿with￿integrity;
3. Preserve￿intellectual￿property￿and￿other￿assets;
4. Manage￿exposures￿by￿following￿processes;￿and
5. Adhere￿to￿our￿Business￿Principles￿and￿applicable￿laws,￿and￿speak￿up.

Code of Conduct Complaints
We￿encourage￿our￿employees￿to￿speak￿up￿and￿feel￿free￿to￿raise￿ethical￿issues￿without￿the￿fear￿of￿retaliation.￿ASML￿has
a￿procedure￿in￿place￿for￿reporting￿issues￿relating￿to￿a￿(possible)￿breach￿of￿the￿Code￿of￿Conduct,￿including￿complaints￿of
a￿financial￿nature￿(Whistleblower’s￿policy).￿For￿those￿employees￿who￿feel￿more￿comfortable￿speaking￿up￿anonymously,
there￿is￿an￿external￿Speak￿Up￿line￿available￿(phone￿and￿webmail).￿The￿reporting￿procedure￿for￿(possible)￿Code￿of
Conduct￿violations￿can￿be￿found￿on￿the￿corporate￿governance￿section￿of￿ASML's￿Website.

For￿more￿information￿about￿this￿topic￿see￿our￿Corporate￿Responsibility￿Report.

C. Principal Accountant Fees and Services
Deloitte￿has￿served￿as￿our￿independent￿registered￿public￿accounting￿firm￿for￿the￿years￿ending￿December￿31,￿2014￿and
2013.￿The￿following￿table￿sets￿out￿the￿aggregate￿fees￿for￿professional￿audit￿services￿and￿other￿services￿rendered￿by
Deloitte￿and￿its￿member￿firms￿and/or￿affiliates￿in￿2014￿and￿2013:

Year ended December 31
(in thousands)
Audit￿fees￿in￿relation￿to￿annual￿reports
Other￿audit￿fees
Tax￿fees

2014
Deloitte
Accountants
B.V.
EUR
1,331
61
128

Deloitte
Network
EUR
-
298
81

Principal accountant fees and services

1,520

379

2013
Deloitte
Accountants
B.V.
EUR
1,679
61
128

Deloitte
Network
EUR
-
303
219

1,868

522

Total
EUR
1,331
359
209

1,899

Total
EUR
1,679
364
347

2,390

ASML￿ANNUAL￿REPORT￿2014

58

 
Audit fees in relation to annual reports and other audit fees
Audit￿fees￿primarily￿relate￿to￿the￿audit￿of￿the￿Financial￿Statements￿as￿set￿out￿in￿this￿Annual￿Report,￿our￿Statutory￿Annual
Report,￿limited￿procedures￿on￿our￿quarterly￿results,￿agreed￿upon￿procedures￿related￿to￿the￿remuneration￿report￿and
services￿related￿to￿statutory￿and￿regulatory￿filings￿of￿ASML￿and￿its￿subsidiaries.

Tax fees
The￿tax￿fees￿include￿tax￿compliance￿services￿and￿tax￿advisory￿services.

The￿Audit￿Committee￿has￿approved￿the￿external￿audit￿plan￿and￿related￿audit￿fees￿for￿the￿year￿2014.

The￿Audit￿Committee￿monitors￿compliance￿with￿the￿Dutch￿and￿US￿rules￿on￿non-audit￿services￿provided￿by￿our
independent￿registered￿public￿accounting￿firm,￿which￿outlines￿strict￿separation￿of￿audit￿and￿advisory￿services￿for￿Dutch
public￿interest￿entities.

D. Exemptions from the Listing Standards for Audit Committees
Not￿applicable.

E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
In￿addition￿to￿dividend￿payments,￿we￿intend￿to￿return￿cash￿to￿our￿shareholders￿on￿a￿regular￿basis￿through￿share
buybacks￿or￿capital￿repayment,￿subject￿to￿our￿actual￿and￿anticipated￿level￿of￿liquidity￿requirements,￿our￿current￿share
price,￿other￿market￿conditions￿and￿other￿relevant￿factors.

On￿April￿17,￿2013,￿we￿announced￿our￿intention￿to￿repurchase￿up￿to￿EUR￿1.0￿billion￿of￿our￿own￿shares￿within￿the
2013-2014￿timeframe.￿During￿the￿period￿from￿April￿18,￿2013￿up￿to￿and￿including￿December￿22,￿2014,￿when￿the￿program
was￿completed,￿we￿had￿purchased￿14,595,554￿shares￿at￿an￿average￿price￿of￿EUR￿68.51￿per￿share￿of￿which￿9,464,503
shares￿have￿been￿cancelled￿in￿2014,￿and￿the￿remainder￿is￿intended￿to￿be￿cancelled￿in￿2015.

The￿following￿tables￿provide￿a￿summary￿of￿shares￿repurchased￿by￿ASML￿in￿2014￿and￿a￿historic￿overview￿of￿previous
share￿buyback￿programs,￿respectively:

Period
January￿20￿-￿31,￿2014
February￿1￿-￿28,￿2014
March￿1￿-￿31,￿2014
April￿1￿-￿30,￿2014
May￿2￿-￿31,￿2014
June￿1￿-￿30,￿2014
July￿1￿-￿31,￿2014
August￿1￿-￿31,￿2014
September￿1￿-￿30,￿2014
October￿1￿-￿31,￿2014
November￿1￿-￿30,￿2014
December￿1￿-￿22,￿2014
Total

Period
Share￿Buybacks
Synthetic￿Share￿Buyback
Share￿Buybacks
Share￿Buybacks
Share￿Buybacks
Synthetic￿Share￿Buyback
Share￿Buybacks
Share￿Buybacks
Share￿Buybacks
Total / Average1

Total number
of shares
purchased
547,500
962,536
765,284
739,855
783,500
1,061,649
1,048,739
602,125
736,294
1,004,378
883,971
845,544
9,981,375

Average price paid
per Share
(EUR)
64.44
63.92
65.55
63.23
59.98
66.52
66.71
70.14
76.62
74.58
81.85
86.06
70.13

Total number of shares
purchased as
part of publicly
announced plans
or programs
547,500
1,510,036
2,275,320
3,015,175
3,798,675
4,860,324
5,909,063
6,511,188
7,247,482
8,251,860
9,135,831
9,981,375

Maximum value of
shares that may yet be
purchased under the
program
(EUR)
664,718,936
603,190,359
553,029,170
506,251,123
459,253,716
388,627,554
318,664,411
276,431,931
220,019,568
145,116,399
72,765,162
-

Year
2006
2007
2007
2008
2011
2012
2012
2013
2014

Total amount paid
(in EUR millions)
677.2
1,011.9
359.8
87.6
700.0
3,728.3
535.2
300.0
700.0
4,371.7

Total Number of
Shares Purchased
40,385,139
55,093,409
17,000,000
5,000,000
25,674,576
93,411,216
13,478,058
4,614,179
9,981,375
171,226,736

Average Price Paid
per Share
(EUR)
16.77
18.37
21.16
17.52
27.26
39.91
39.71
65.02
70.13
25.53

Reduction of Shares
Outstanding vs
Beginning of Year
(Percentage)
8.3
11.5
3.6
1.1
5.9
22.6
3.3
1.1
2.3
35.3

1

Totals,￿average￿and￿percentage￿are￿excluding￿the￿synthetic￿share￿buyback￿executed￿in￿2012￿as￿part￿of￿our￿CCIP.￿The￿percentage￿represents￿the
reduction￿of￿shares￿issued￿and￿outstanding￿compared￿to￿January￿1,￿2006.

ASML￿ANNUAL￿REPORT￿2014

59

F. Change in Registrant’s Certifying Accountant
Based￿on￿mandatory￿firm￿rotation￿required￿under￿Dutch￿law,￿in￿2014￿we￿completed￿our￿proposal￿process￿for￿a￿new
auditor￿starting￿January￿1,￿2016.￿Our￿proposal￿is￿subject￿to￿approval￿at￿the￿2015￿AGM.

G. Corporate Governance
NASDAQ￿rules￿provide￿that￿foreign￿private￿issuers￿may￿follow￿home￿country￿practice￿in￿lieu￿of￿the￿NASDAQ￿corporate
governance￿standards￿subject￿to￿certain￿exceptions￿and￿except￿to￿the￿extent￿that￿such￿exemptions￿would￿be￿contrary￿to
US￿federal￿securities￿laws.￿The￿practices￿followed￿by￿ASML￿in￿lieu￿of￿NASDAQ￿rules￿are￿described￿below:

• ASML￿does￿not￿follow￿NASDAQ’s￿quorum￿requirements￿applicable￿to￿meetings￿of￿ordinary￿shareholders.￿In

accordance￿with￿Dutch￿law￿and￿Dutch￿generally￿accepted￿business￿practice,￿ASML’s￿Articles￿of￿Association￿provide
that￿there￿are￿no￿quorum￿requirements￿generally￿applicable￿to￿General￿Meetings￿of￿Shareholders.

• ASML￿does￿not￿follow￿NASDAQ’s￿requirements￿regarding￿the￿provision￿of￿proxy￿statements￿for￿General￿Meetings￿of

Shareholders.￿Dutch￿law￿does￿not￿have￿a￿regulatory￿regime￿for￿the￿solicitation￿of￿proxies:￿the￿solicitation￿of￿proxies￿is
not￿a￿generally￿accepted￿business￿practice￿in￿the￿Netherlands.￿ASML￿does￿provide￿shareholders￿with￿an￿agenda￿and
other￿relevant￿documents￿for￿the￿General￿Meeting￿of￿Shareholders.

• Dutch￿law￿requires￿that￿ASML’s￿external￿auditors￿be￿appointed￿by￿the￿Annual￿General￿Meeting￿of￿Shareholders￿and

not￿by￿the￿Audit￿Committee￿as￿contemplated￿by￿NASDAQ￿rules.

• ASML￿does￿not￿follow￿NASDAQ's￿requirement￿regarding￿distribution￿to￿shareholders￿of￿copies￿of￿an￿Annual￿Report

containing￿audited￿Financial￿Statements￿prior￿to￿our￿Annual￿General￿Meeting￿of￿Shareholders.￿The￿distribution￿of￿our
Annual￿Report￿to￿shareholders￿is￿not￿required￿under￿Dutch￿corporate￿law￿or￿Dutch￿securities￿laws,￿or￿by￿Euronext
Amsterdam.￿Furthermore,￿it￿is￿generally￿accepted￿business￿practice￿for￿Dutch￿companies￿not￿to￿distribute￿Annual
Reports.￿In￿part,￿this￿is￿because￿the￿Dutch￿system￿of￿bearer￿shares￿has￿made￿it￿impractical￿to￿keep￿a￿current￿list
of￿holders￿of￿the￿bearer￿shares￿in￿order￿to￿distribute￿the￿Annual￿Reports.￿Instead,￿we￿make￿our￿Annual￿Reports
available￿at￿our￿corporate￿head￿office￿in￿the￿Netherlands￿(and￿at￿the￿offices￿of￿our￿Dutch￿listing￿agent￿as￿stated￿in
the￿convening￿notice￿for￿the￿meeting)￿no￿later￿than￿42￿days￿prior￿to￿convocation￿of￿the￿Annual￿General￿Meeting￿of
Shareholders.￿In￿addition,￿we￿post￿a￿copy￿of￿our￿Annual￿Report￿on￿our￿Website￿prior￿to￿the￿Annual￿General￿Meeting￿of
Shareholders.

• ASML￿does￿not￿follow￿NASDAQ’s￿requirement￿to￿obtain￿shareholder￿approval￿of￿stock￿option￿or￿purchase￿plans￿or

other￿equity￿compensation￿arrangements￿available￿to￿officers,￿directors￿or￿employees.￿It￿is￿not￿required￿under￿Dutch
law￿or￿generally￿accepted￿practice￿for￿Dutch￿companies￿to￿obtain￿shareholder￿approval￿of￿equity￿compensation
arrangements￿available￿to￿officers,￿directors￿or￿employees.￿The￿Annual￿General￿Meeting￿of￿Shareholders￿adopts
the￿remuneration￿policy￿for￿the￿BoM,￿approves￿equity￿compensation￿arrangements￿for￿the￿BoM￿and￿approves￿the
remuneration￿for￿the￿Supervisory￿Board.￿The￿Remuneration￿Committee￿evaluates￿the￿achievements￿of￿individual
members￿of￿the￿BoM￿with￿respect￿to￿the￿short￿and￿long-term￿quantitative￿performance,￿the￿full￿Supervisory￿Board
evaluates￿the￿quantitative￿performance￿criteria.￿Equity￿compensation￿arrangements￿for￿employees￿are￿adopted￿by￿the
BoM￿within￿limits￿approved￿by￿the￿Annual￿General￿Meeting￿of￿Shareholders.

H. Mine Safety Disclosure
Not￿applicable.

ASML￿ANNUAL￿REPORT￿2014

60

Part III

Item 17 Financial Statements

Not￿applicable.

Item 18 Financial Statements

In￿response￿to￿this￿item,￿we￿incorporate￿herein￿by￿reference￿our￿Financial￿Statements￿set￿out￿on￿pages￿F-2￿through￿F-52
hereto.

Item 19 Exhibits

Exhibit￿No.
1

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

4.12

4.13

4.14

4.15

4.16

4.17

4.18

4.19

4.20

4.21

4.22

4.22

4.23

Description
Articles￿of￿Association￿of￿ASML￿Holding￿N.V.￿(English￿translation)￿(Incorporated￿by￿reference￿to￿Amendment￿No.￿13￿to￿the
Registrant’s￿Registration￿Statement￿on￿Form￿8-A/A,￿filed￿with￿the￿SEC￿on￿February￿8,￿2013)
Agreement￿between￿ASM￿Lithography￿B.V.￿and￿Carl￿Zeiss,￿dated￿March￿17,￿2000￿(Incorporated￿by￿reference￿to￿the
Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿fiscal￿year￿ended￿December￿31,￿2000)￿1
Agreement￿between￿ASML￿Holding￿N.V.￿and￿Carl￿Zeiss,￿dated￿October￿24,￿2003￿(Incorporated￿by￿reference￿to￿the
Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2003)￿1
Form￿of￿Indemnity￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿members￿of￿its￿Board￿of￿Management￿(Incorporated￿by
reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2003)
Form￿of￿Indemnity￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿members￿of￿its￿Supervisory￿Board￿(Incorporated￿by
reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2003)
Form￿of￿Employment￿Agreement￿for￿members￿of￿the￿Board￿of￿Management￿(Incorporated￿by￿reference￿to￿the￿Registrant’s
Annual￿Report￿on￿Form￿20-F￿for￿the￿fiscal￿year￿ended￿December￿31,￿2003)
Nikon-ASML￿Patent￿Cross-License￿Agreement,￿dated￿December￿10,￿2004,￿between￿ASML￿Holding￿N.V.￿and￿Nikon
Corporation1,2
ASML/Zeiss￿Sublicense￿Agreement,￿2004,￿dated￿December￿10,￿2004,￿between￿Carl￿Zeiss￿SMT￿AG￿and￿ASML￿Holding￿N.V.
(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿fiscal￿year￿ended￿December￿31,￿2004)￿1
ASML￿Incentive￿and￿New￿Hire￿Option￿Plan￿for￿Board￿of￿Management￿(Incorporated￿by￿reference￿to￿the￿Registrant’s
Registration￿Statement￿on￿Form￿S-8,￿filed￿with￿the￿SEC￿on￿June￿9,￿2004￿(File￿No.￿333-116337))
ASML￿Option￿Plan￿for￿Management￿of￿ASML￿Holding￿Group￿Companies￿(Incorporated￿by￿reference￿to￿the￿Registrant’s
Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿June￿30,￿2005￿(file￿No.￿333-126340))
ASML￿Stock￿Option￿Plan￿for￿New￿Hire￿Options￿granted￿to￿Members￿of￿the￿Board￿of￿Management￿(Version￿April￿2006)
(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿August￿7,￿2006
(file￿No.￿333-136362))
ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿April
2006)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿August￿7,
2006￿(file￿No.￿333-136362))
ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿July
2006)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿August￿7,
2006￿(file￿No.￿333-136362))
ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version
October￿2006)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on
August￿7,￿2006￿(file￿No.￿333-136362))
ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿January
2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿July￿5,
2007￿(file￿No.￿333-144356))
ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿April
2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿July￿5,
2007￿(file￿No.￿333-144356))
ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿July
2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿July￿5,
2007￿(file￿No.￿333-144356))
ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version
October￿2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on
July￿5,￿2007￿(file￿No.￿333-144356))
ASML￿Performance￿Stock￿Plan￿for￿Members￿of￿the￿Board￿of￿Management￿(Version￿1)￿(Incorporated￿by￿reference￿to￿the
Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿July￿5,￿2007￿(file￿No.￿333-144356))
ASML￿Performance￿Stock￿Option￿Plan￿for￿Members￿of￿the￿Board￿of￿Management￿(Version￿2)￿(Incorporated￿by￿reference￿to
the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿July￿5,￿2007￿(file￿No.￿333-144356))
ASML￿Stock￿Option￿Plan￿from￿Base￿Salary￿for￿Senior￿&￿Executive￿Management￿(Version￿October￿2007)￿(Incorporated
by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿November￿2,￿2007￿(file￿No.
333-147128))
ASML￿Performance￿Stock￿Option￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the
Registrant’s.￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿August￿29,￿2008￿(file￿No.￿333-153277))
ASML￿Performance￿Share￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the
Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿August￿29,￿2008￿(file￿No.￿333-153277))
ASML￿Performance￿Stock￿Plan￿for￿Members￿of￿the￿Board￿of￿Management￿(Incorporated￿by￿reference￿to￿the￿Registrant’s
Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿October￿13,￿2009￿(file￿No.￿333-162439))
ASML￿Performance￿Stock￿Option￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the
Registrant’s.￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿October￿13,￿2009￿(file￿No.￿333-162439))

ASML￿ANNUAL￿REPORT￿2014

61

Exhibit￿No.
4.25

4.26

4.27

4.28

8.1
12.1
13.1
15.1
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE

Description
ASML￿Performance￿Share￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the
Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿October￿13,￿2009￿(file￿No.￿333-162439))
450mm￿NRE￿Funding￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿Intel￿Corporation,￿dated￿July￿9,￿2012￿(Incorporated￿by
reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2012)1
EUV￿NRE￿Funding￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿Intel￿Corporation,￿dated￿July￿9,￿2012￿(Incorporated￿by
reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2012)1
Shareholder￿Agreement￿between￿ASML￿Holding￿N.V.,￿Intel￿Holdings￿B.V.,￿Intel￿Corporation￿and￿Stichting
Administratiekantoor￿MAKTSJAB￿dated￿September￿12,￿2012￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Annual￿Report
on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2012)
List￿of￿Main￿Subsidiaries2
Certification￿of￿CEO￿and￿CFO￿Pursuant￿to￿Rule￿13a-14(a)￿of￿the￿Securities￿Exchange￿Act￿of￿19342
Certification￿of￿CEO￿and￿CFO￿Pursuant￿to￿Rule￿13a-14(b)￿of￿the￿Securities￿Exchange￿Act￿of￿19342
Consent￿of￿Deloitte￿Accountants￿B.V.2
XBRL￿Instance￿Document2
XBRL￿Taxonomy￿Extension￿Schema￿Document2
XBRL￿Taxonomy￿Extension￿Calculation￿Linkbase￿Document2
XBRL￿Taxonomy￿Extension￿Definition￿Linkbase￿Document2
XBRL￿Taxonomy￿Extension￿Label￿Linkbase￿Document2
XBRL￿Taxonomy￿Extension￿Presentation￿Linkbase￿Document2

1
2

Certain￿information￿omitted￿pursuant￿to￿a￿request￿for￿confidential￿treatment￿filed￿separately￿with￿the￿SEC.
Filed￿at￿the￿SEC￿herewith.

ASML￿is￿party￿to￿two￿debt￿instruments￿under￿which￿the￿total￿amount￿of￿securities￿under￿each￿debt￿instrument￿does￿not
exceed￿10￿percent￿of￿the￿total￿assets￿of￿ASML￿and￿its￿subsidiaries￿on￿a￿consolidated￿basis.￿Pursuant￿to￿paragraph￿2(b)
(i)￿of￿the￿instructions￿to￿the￿exhibits￿to￿Form￿20-F,￿ASML￿agrees￿to￿furnish￿a￿copy￿of￿such￿instruments￿to￿the￿SEC￿upon
request.

ASML￿Holding￿N.V.￿hereby￿certifies￿that￿it￿meets￿all￿of￿the￿requirements￿for￿filing￿on￿Form￿20-F￿and￿that￿it￿has￿duly
caused￿and￿authorized￿the￿undersigned￿to￿sign￿this￿Annual￿Report￿on￿its￿behalf.￿

ASML￿Holding￿N.V.￿(Registrant)￿

￿￿

￿/s/￿Peter￿T.F.M.￿Wennink
Peter￿T.F.M.￿Wennink
President,￿CEO￿and￿member￿of￿the￿Board￿of￿Management
Dated:￿February￿10,￿2015￿

/s/￿Wolfgang￿U.￿Nickl
Wolfgang￿U.￿Nickl
Executive￿Vice￿President,￿CFO￿and￿member￿of￿the￿Board￿of￿Management
Dated:￿February￿10,￿2015

ASML￿ANNUAL￿REPORT￿2014

62

Financial Statements

Index to Financial Statements

F-2

F-3

F-4

F-5

F-7

F-8

Consolidated￿Statements￿of￿Operations

Consolidated￿Statements￿of￿Comprehensive￿Income

Consolidated￿Balance￿Sheets

Consolidated￿Statements￿of￿Shareholders’￿Equity

Consolidated￿Statements￿of￿Cash￿Flows

Notes￿to￿the￿Consolidated￿Financial￿Statements

F-52

Report￿of￿Independent￿Registered￿Public￿Accounting￿Firm

ASML￿ANNUAL￿REPORT￿2014

F-1

Consolidated Statements of Operations

Notes

21

21

22

28
22,￿23
22

24

20

1
1

1
1

1

Year ended December 31
(in thousands, except per share data)

2014
EUR

2013
EUR

2012
EUR

Net￿system￿sales
Net￿service￿and￿field￿option￿sales

4,242,790
1,613,487

3,993,129
1,252,197

3,801,632
929,923

Total net sales
Cost￿of￿system￿sales
Cost￿of￿service￿and￿field￿option￿sales

5,856,277
(2,335,512)
(924,391)

5,245,326
(2,233,621)
(834,443)

4,731,555
(2,198,921)
(527,377)

Total cost of sales

(3,259,903)

(3,068,064)

(2,726,298)

Gross profit
Other￿income
Research￿and￿development￿costs
Selling,￿general￿and￿administrative￿costs

Income from operations
Interest￿and￿other,￿net

Income before income taxes
Provision￿for￿income￿taxes

2,596,374
81,006
(1,074,035)
(321,110)

1,282,235
(8,600)

1,273,635
(76,995)

2,177,262
64,456
(882,029)
(311,741)

1,047,948
(24,471)

1,023,477
(7,987)

2,005,257
-
(589,182)
(259,301)

1,156,774
(6,196)

1,150,578
(4,262)

Net income

1,196,640

1,015,490

1,146,316

Basic￿net￿income￿per￿ordinary￿share
Diluted￿net￿income￿per￿ordinary￿share1
Number￿of￿ordinary￿shares￿used￿in￿computing￿per￿share￿amounts
(in￿thousands)
Basic
Diluted1

2.74
2.72

2.36
2.34

2.70
2.68

437,142
439,693

429,770
433,446

424,096
426,986

The￿calculation￿of￿diluted￿net￿income￿per￿ordinary￿share￿assumes￿the￿exercise￿of￿options￿issued￿under￿our￿stock￿option￿plans￿and￿the￿issuance￿of
shares￿under￿our￿share￿plans￿for￿periods￿in￿which￿exercises￿or￿issuances￿would￿have￿a￿dilutive￿effect.￿The￿calculation￿of￿diluted￿net￿income￿per
ordinary￿share￿does￿not￿assume￿exercise￿of￿such￿options￿or￿issuance￿of￿shares￿when￿such￿exercises￿or￿issuance￿would￿be￿anti-dilutive.

ASML￿ANNUAL￿REPORT￿2014

F-2

Consolidated Statements of Comprehensive Income

Notes

4
4

Year ended December 31
(in thousands)

2014
EUR

2013
EUR

2012
EUR

Net income

1,196,640

1,015,490

1,146,316

Other comprehensive income:

Foreign currency translation, net of taxes:
Gain￿(loss)￿on￿foreign￿currency￿translation

Financial instruments, net of taxes:
Gain￿(loss)￿on￿derivative￿financial￿instruments
Transfers￿to￿net￿income
Other comprehensive income, net of taxes

230,388

(113,779)

8,063

17,375
6,691
254,454

(5,370)
(2,276)
(121,425)

214
(7,761)
516

Total comprehensive income, net of taxes

1,451,094

894,065

1,146,832

Attributable￿to￿equity￿holders

1,451,094

894,065

1,146,832

ASML￿ANNUAL￿REPORT￿2014

F-3

Consolidated Balance Sheets

Notes

As of December 31
(in thousands, except share and per share data)

2014
EUR

2013
EUR

5
5
6
7

8
20
9

7
20
9
10
11
12

13

15
14
20

15
20
14
13

Assets
Cash￿and￿cash￿equivalents
Short-term￿investments
Accounts￿receivable,￿net
Finance￿receivables,￿net
Current￿tax￿assets
Inventories,￿net
Deferred￿tax￿assets
Other￿assets
Total current assets

Finance￿receivables,￿net
Deferred￿tax￿assets
Other￿assets
Goodwill
Other￿intangible￿assets,￿net
Property,￿plant￿and￿equipment,￿net
Total non-current assets

2,419,487
334,864
1,052,504
196,087
43,876
2,549,837
159,460
390,091
7,146,206

55,261
28,760
444,820
2,357,536
723,839
1,447,523
5,057,739

2,330,694
679,884
878,321
250,472
32,333
2,393,022
124,431
336,421
7,025,578

46,017
139,513
298,559
2,088,589
697,634
1,217,840
4,488,152

Total assets

12,203,945

11,513,730

Liabilities and shareholders’ equity
Accounts￿payable
Accrued￿and￿other￿liabilities
Current￿tax￿liabilities
Current￿portion￿of￿long-term￿debt
Provisions
Deferred￿and￿other￿tax￿liabilities
Total current liabilities

Long-term￿debt
Deferred￿and￿other￿tax￿liabilities
Provisions
Accrued￿and￿other￿liabilities
Total non-current liabilities

496,236
2,347,799
36,293
4,261
2,354
1,928
2,888,871

1,149,876
237,315
3,638
411,655
1,802,484

625,870
2,216,882
15,803
4,385
2,227
3,494
2,868,661

1,070,185
364,695
4,620
283,142
1,722,642

Total liabilities

4,691,355

4,591,303

17,￿19

Commitments￿and￿contingencies

Cumulative￿Preference￿Shares;￿EUR￿0.09￿nominal￿value;
700,000,000￿shares￿authorized￿at￿December￿31,￿2014￿and￿2013;
none￿issued￿and￿outstanding￿at￿December￿31,￿2014￿and￿2013;

Ordinary￿Shares￿B;￿EUR￿0.01￿nominal￿value;
9,000￿shares￿authorized￿at￿December￿31,￿2014￿and￿2013;
none￿issued￿and￿outstanding￿per￿December￿31,￿2014￿and￿2013;

Ordinary￿Shares;￿EUR￿0.09￿nominal￿value;
699,999,000￿shares￿authorized￿at￿December￿31,￿2014;
432,935,288￿issued￿and￿outstanding￿at￿December￿31,￿2014;
699,999,000￿shares￿authorized￿at￿December￿31,￿2013;
440,852,334￿issued￿and￿outstanding￿at￿December￿31,￿2013;
Issued￿and￿outstanding￿shares
Share￿premium
Treasury￿shares￿at￿cost
Retained￿earnings
Accumulated￿other￿comprehensive￿income
Total shareholders’ equity

26

-

-

-

-

-

-

39,426
3,002,050
(389,443)
4,648,541
212,016
7,512,590

40,092
2,912,862
(364,702)
4,376,613
(42,438)
6,922,427

Total liabilities and shareholders’ equity

12,203,945

11,513,730

ASML￿ANNUAL￿REPORT￿2014

F-4

Consolidated Statements of Shareholders’ Equity

Issued and
Outstanding Shares

Notes

(in thousands)
Balance at January 1, 2012

Number1

413,669

Amount
EUR
38,354

Share
Premium
EUR
473,043

Treasury
Shares at
Cost
EUR
(416,417)

Retained
Earnings
EUR
3,270,703

Accumulated
OCI
EUR
78,471

Total
EUR
3,444,154

4
4

26,￿28
26,￿28
26,￿28

26,￿27
26,￿27
18,￿22
18
26
18,￿20

4
4

26,￿28

26,￿27
26,￿27
18,￿22
18
26
18,￿20

4
4

26,￿28

26,￿27
26,￿27
18,￿22
18
26
18,￿20

Components of comprehensive
income:
Net￿income
Foreign￿currency￿translation
Loss￿on￿financial￿instruments,￿net￿of
taxes
Total comprehensive income

CCIP:
Issuance￿of￿shares
Fair￿value￿differences3
Capital￿repayment4

Purchase of treasury shares
Cancellation of treasury shares
Share-based payments
Issuance of shares
Dividend paid
Tax benefit from share-based
payments
Balance at December 31, 2012

Components of comprehensive
income:
Net￿income
Foreign￿currency￿translation
Loss￿on￿financial￿instruments,￿net￿of
taxes
Total comprehensive income

CCIP:
Fair￿value￿differences5

Purchase of treasury shares
Cancellation of treasury shares
Share-based payments6
Issuance of shares7
Dividend paid
Tax benefit from share-based
payments
Balance at December 31, 2013
Components of comprehensive
income:
Net￿income
Foreign￿currency￿translation
Gain￿on￿financial￿instruments,￿net￿of
taxes
Total comprehensive income

CCIP:
Fair￿value￿differences5

Purchase of treasury shares
Cancellation of treasury shares
Share-based payments
Issuance of shares
Dividend paid
Tax benefit from share-based
payments
Balance at December 31, 2014

-
-
-

-

96,566
-
(93,411)

(13,478)
-
-
3,819
-
-

-
-
-

-

-
-
-

-

-
-
-

-

1,146,316
-
-

-
8,063
(7,547)

1,146,316
8,063
(7,547)

1,146,316

516

1,146,832

8,691
-
(8,691)

3,968,677
(123,416)
(3,845,261)

(198)
(1,030)
-
344
-
-

-
-
18,714
(10,222)
-
2,116

-
-
125,628

(535,175)
294,752
-
66,638
-
-

-
-
-

-
(293,722)
-
(3,046)
(188,892)
-

-
-
-

-
-
-
-
-
-

3,977,368
(123,416)
(3,728,324)

(535,373)
-
18,714
53,714
(188,892)
2,116

407,165

37,470

483,651

(464,574)

3,931,359

78,987 2

4,066,893

-
-
-

-

-

-
-
-

-

-

(4,614)
-
-
38,301
-
-

-
(854)
-
3,476
-
-

-
-
-

-

20,956

-
-
95,895
2,309,250
-
3,110

-
-
-

-

-

(300,000)
349,261
-
50,611
-
-

1,015,490
-
-

-
(113,779)
(7,646)

1,015,490
(113,779)
(7,646)

1,015,490

(121,425)

894,065

-

-
(348,407)
-
(5,744)
(216,085)
-

-

-
-
-
-
-
-

20,956

(300,000)
-
95,895
2,357,593
(216,085)
3,110

440,852

40,092

2,912,862

(364,702)

4,376,613

(42,438) 2

6,922,427

-
-
-

-

-

(9,981)
-
-
2,064
-
-

-
-
-

-

-

-
(852)
-
186
-
-

-
-
-

-

28,086

-
-
63,380
(6,250)
-
3,972

-
-
-

-

-

(700,000)
610,698
-
64,561
-
-

1,196,640
-
-

-
230,388
24,066

1,196,640
230,388
24,066

1,196,640

254,454

1,451,094

-

-
(609,846)
-
(46,904)
(267,962)
-

-

-
-
-
-
-
-

28,086

(700,000)
-
63,380
11,593
(267,962)
3,972

432,935

39,426

3,002,050

(389,443)

4,648,541

212,016 2

7,512,590

1

2

As￿of￿December￿31,￿2014,￿the￿number￿of￿issued￿shares￿was￿438,073,643.￿This￿includes￿the￿number￿of￿issued￿and￿outstanding￿shares￿of￿432,935,288
and￿the￿number￿of￿treasury￿shares￿of￿5,138,355.￿As￿of￿December￿31,￿2013,￿the￿number￿of￿issued￿shares￿was￿446,822,452.￿This￿includes￿the￿number
of￿issued￿and￿outstanding￿shares￿of￿440,852,334￿and￿the￿number￿of￿treasury￿shares￿of￿5,970,118.￿As￿of￿December￿31,￿2012,￿the￿number￿of￿issued
shares￿was￿419,852,467.￿This￿includes￿the￿number￿of￿issued￿and￿outstanding￿shares￿of￿407,165,221￿and￿the￿number￿of￿treasury￿shares￿of￿12,687,246.
As￿of￿December￿31,￿2014,￿accumulated￿OCI,￿net￿of￿taxes,￿consists￿of￿EUR￿200.1￿million￿relating￿to￿foreign￿currency￿translation￿gain￿(2013:￿EUR￿30.2
million￿loss;￿2012:￿EUR￿83.5￿million￿gain)￿and￿EUR￿11.9￿million￿relating￿to￿unrealized￿gains￿on￿financial￿instruments￿(2013:￿EUR￿12.2￿million￿losses;
2012:￿EUR￿4.5￿million￿losses).

ASML￿ANNUAL￿REPORT￿2014

F-5

3
4

5

6

7

The￿difference￿between￿the￿fair￿value￿of￿the￿shares￿and￿the￿subscription￿price￿of￿the￿shares￿issued￿to￿the￿Participating￿Customers￿in￿the￿CCIP.
In￿2012,￿as￿part￿of￿the￿capital￿repayment,￿EUR￿3,728.3￿million￿of￿shareholders'￿equity￿was￿returned￿to￿our￿shareholders￿(excluding￿Participating
Customers￿in￿the￿CCIP)￿and￿the￿number￿of￿shares￿was￿reduced￿by￿23￿percent.￿See￿Note￿26.
In￿2014,￿EUR￿28.1￿million￿(2013:￿EUR￿21.0￿million)￿is￿recognized￿to￿increase￿equity￿to￿the￿fair￿value￿of￿the￿shares￿issued￿to￿the￿Participating
Customers￿in￿the￿CCIP.￿The￿portion￿of￿the￿NRE￿funding￿allocable￿to￿the￿shares￿is￿recognized￿over￿the￿NRE￿Funding￿Agreements￿period￿(2013-2017).
Share-based￿payments￿include￿an￿amount￿of￿EUR￿43.5￿million￿in￿relation￿to￿the￿fair￿value￿compensation￿of￿unvested￿equity￿awards￿exchanged￿as￿part
of￿acquisition￿of￿Cymer.
Issuance￿of￿shares￿includes￿36,464,576￿ordinary￿shares￿issued￿in￿relation￿to￿the￿acquisition￿of￿Cymer￿for￿a￿total￿fair￿value￿of￿EUR￿2,346.7￿million.

ASML￿ANNUAL￿REPORT￿2014

F-6

Consolidated Statements of Cash Flows

Notes

11,￿12
10,￿11,￿12
12
18
6
8
20

6
7
8
9
13,￿14

20

12
11
5
5

26
26,￿27

26
15
18,￿20

5
5

1

2

3

4

5

6

7

Year ended December 31
(in thousands)

2014
EUR

2013
EUR

2012
EUR

Cash Flows from Operating Activities
Net￿income

1,196,640

1,015,490

1,146,316

Adjustments￿to￿reconcile￿net￿income
to￿net￿cash￿flows￿from￿operating￿activities:
Depreciation￿and￿amortization
Impairment
Loss￿on￿disposal￿of￿property,￿plant￿and￿equipment1
Share-based￿payments
Allowance￿for￿doubtful￿receivables
Allowance￿for￿obsolete￿inventory
Deferred￿income￿taxes
Changes in assets and liabilities:
Accounts￿receivable
Finance￿receivables
Inventories1,2
Other￿assets
Accrued￿and￿other￿liabilities
Accounts￿payable
Current￿income￿taxes
Net cash provided by operating activities

Cash Flows from Investing Activities
Purchase￿of￿property,￿plant￿and￿equipment2
Purchase￿of￿intangible￿assets
Purchase￿of￿available￿for￿sale￿securities
Maturity￿of￿available￿for￿sale￿securities
Acquisition￿of￿subsidiaries￿(net￿of￿cash￿acquired)
Net cash used in investing activities

Cash Flows from Financing Activities
Dividend￿paid
Purchase￿of￿shares
Net￿proceeds￿from￿issuance￿of￿shares
Net￿proceeds￿from￿issuance￿of￿notes
Repurchase￿of￿notes
Capital￿Repayment
Repayment￿of￿debt
Tax￿benefit￿(deficit)￿from￿share-based￿payments
Net cash used in financing activities

Net￿cash￿flows
Effect￿of￿changes￿in￿exchange￿rates￿on￿cash
Net increase (decrease) in cash and cash equivalents
Cash￿and￿cash￿equivalents￿at￿beginning￿of￿the￿year
Cash and cash equivalents at end of the year

Supplemental Disclosures of Cash Flow Information:
Interest￿and￿other￿paid
Income￿taxes￿paid

254,644
10,528
3,502
63,380
133
162,821
(59,050)

(164,850)
51,132
(293,404)
(112,424)
36,524
(136,192)
11,822
1,025,206

(358,280)
(2,952)
(504,756)
849,776
-
(16,212)

(267,962)
(700,000)
39,679
-
-
-
(4,128)
3,972
(928,439)

80,555
8,238
88,793
2,330,694
2,419,487

228,775
13,057
2,823
52,371
1,062
164,852
(22,658)

(192,149)
9,277
(518,121)
(32,941)
(57,282)
321,486
68,131
1,054,173

(210,804)
(4,000)
(904,856)
1,195,031
(443,712) 3
(368,341)

(216,085)
(300,000)
31,822
740,445 5
(368,303) 6
-
(4,100)
3,110
(113,111)

572,721
(9,623)
563,098
1,767,596
2,330,694

186,620
3,234
2,272
18,714
458
130,911
(72,374)

246,982
(225,103)
(352,716)
19,117
(147,691)
(225,083)
(28,179)
703,478

(171,878)
(7,658)
(1,379,997)
449,992
(10,292)
(1,119,833)

(188,892)
(535,373)
3,907,666 4
-
-
(3,728,324) 7
(2,776)
2,116
(545,583)

(961,938)
(2,248)
(964,186)
2,731,782
1,767,596

(42,439)
(124,325)

(50,535)
(2,278)

(37,906)
(109,504)

An￿amount￿of￿EUR￿30.7￿million￿(2013:￿EUR￿48.2￿million,￿2012:￿EUR￿222.9￿million)￿of￿the￿disposal￿of￿property,￿plant￿and￿equipment￿relates￿to￿non-cash
transfers￿to￿inventory.￿Since￿the￿transfers￿between￿inventory￿and￿property,￿plant￿and￿equipment￿are￿non-cash￿events,￿these￿are￿not￿reflected￿in￿these
Consolidated￿Statements￿of￿Cash￿Flows.￿For￿further￿details￿see￿Note￿12.
An￿amount￿of￿EUR￿95.5￿million￿(2013:￿EUR￿115.9￿million,￿2012:￿EUR￿204.8￿million)￿of￿the￿additions￿in￿property,￿plant￿and￿equipment￿relates￿to￿non-
cash￿transfers￿from￿inventory.￿Other￿movements￿include￿EUR￿1.5￿million￿increase￿(2013:￿EUR￿12.5￿million￿decrease,￿2012:￿EUR￿9.6￿million￿decrease),
mainly￿relating￿to￿investments￿not￿yet￿paid￿and￿inceptions￿of￿finance￿lease￿arrangements.￿Since￿the￿transfers￿between￿inventory￿and￿property,￿plant
and￿equipment￿are￿non-cash￿events,￿these￿are￿not￿reflected￿in￿these￿Consolidated￿Statements￿of￿Cash￿Flows.￿For￿further￿details￿see￿Note￿12.
In￿addition￿to￿the￿cash￿paid￿in￿relation￿to￿the￿acquisition￿of￿Cymer,￿we￿issued￿36,464,576￿shares￿for￿an￿amount￿of￿EUR￿2,346.7￿million￿(non-cash
event)￿as￿part￿of￿the￿consideration￿paid.
Net￿proceeds￿from￿issuance￿of￿shares￿includes￿an￿amount￿of￿EUR￿3,853.9￿million￿related￿to￿the￿share￿issuances￿in￿connection￿to￿the￿CCIP.￿See￿Note
28￿to￿the￿Financial￿Statements.
Net￿proceeds￿from￿issuance￿of￿notes￿relate￿to￿the￿total￿cash￿proceeds￿of￿EUR￿740.4￿million￿(net￿of￿incurred￿transaction￿costs)￿from￿the￿issuance￿of
our￿EUR￿750￿million￿3.375￿percent￿senior￿notes￿due￿2023.
Repurchase￿of￿notes￿relates￿to￿the￿net￿cash￿outflows￿of￿EUR￿368.3￿million￿for￿the￿partial￿repurchase￿of￿our￿EUR￿600￿million￿5.75￿percent￿senior￿notes
due￿2017￿including￿the￿partial￿unwinding￿of￿the￿related￿interest￿rate￿swaps.
The￿difference￿of￿EUR￿125.6￿million￿between￿the￿capital￿repayment￿of￿EUR￿3,728.3￿million￿and￿the￿net￿proceeds￿from￿issuance￿of￿shares￿of￿EUR
3,853.9￿million￿relates￿to￿the￿capital￿repayment￿on￿ASML's￿treasury￿shares￿which￿was￿part￿of￿the￿synthetic￿share￿buyback￿in￿November￿2012.

ASML￿ANNUAL￿REPORT￿2014

F-7

Notes to the Consolidated Financial Statements

1. General Information / Summary of Significant Accounting Policies
ASML,￿with￿its￿corporate￿headquarters￿in￿Veldhoven,￿the￿Netherlands,￿is￿engaged￿in￿the￿development,￿production,
marketing,￿selling￿and￿servicing￿of￿advanced￿semiconductor￿equipment￿systems,￿exclusively￿consisting￿of￿lithography
systems.￿ASML's￿principal￿operations￿are￿in￿the￿Netherlands,￿the￿United￿States￿and￿Asia.

Our￿shares￿are￿listed￿for￿trading￿in￿the￿form￿of￿registered￿shares￿on￿NASDAQ￿and￿on￿Euronext￿Amsterdam.￿The￿principal
trading￿market￿of￿our￿ordinary￿shares￿is￿Euronext￿Amsterdam.

Basis of Preparation
The￿accompanying￿Consolidated￿Financial￿Statements￿are￿stated￿in￿thousands￿of￿EUR￿unless￿indicated￿otherwise.

The￿accompanying￿Consolidated￿Financial￿Statements￿have￿been￿prepared￿in￿conformity￿with￿US￿GAAP.

On￿May￿30,￿2013,￿we￿acquired￿100￿percent￿of￿the￿issued￿share￿capital￿of￿Cymer.￿Comparative￿financial￿information
presented￿in￿our￿Consolidated￿Financial￿Statements￿includes￿Cymer￿from￿May￿30,￿2013￿onwards,￿Cymer￿is￿not￿included
in￿the￿comparative￿financial￿information￿before￿May￿30,￿2013.

Use of Estimates
The￿preparation￿of￿ASML’s￿Consolidated￿Financial￿Statements￿in￿conformity￿with￿US￿GAAP￿requires￿management
to￿make￿estimates￿and￿assumptions￿that￿affect￿the￿reported￿amounts￿of￿assets￿and￿liabilities￿and￿the￿disclosure￿of
contingent￿assets￿and￿liabilities￿on￿the￿balance￿sheet￿dates,￿and￿the￿reported￿amounts￿of￿net￿sales￿and￿costs￿during￿the
reported￿periods.￿Actual￿results￿could￿differ￿from￿those￿estimates.

Principles of Consolidation
The￿Consolidated￿Financial￿Statements￿include￿the￿Financial￿Statements￿of￿ASML￿Holding￿N.V.￿and￿all￿of￿its￿subsidiaries
and￿the￿VIE￿of￿which￿ASML￿is￿the￿primary￿beneficiary.￿All￿intercompany￿profits,￿balances￿and￿transactions￿have￿been
eliminated￿in￿the￿consolidation.

Subsidiaries
Subsidiaries￿are￿all￿entities￿over￿which￿ASML￿has￿the￿power￿to￿govern￿financial￿and￿operating￿policies￿generally
accompanying￿a￿shareholding￿of￿more￿than￿50￿percent￿of￿the￿voting￿rights.￿As￿from￿the￿date￿that￿these￿criteria￿are￿met,
the￿financial￿data￿of￿the￿relevant￿subsidiaries￿are￿included￿in￿the￿consolidation.

Business Combinations
Acquisitions￿of￿subsidiaries￿are￿included￿on￿the￿basis￿of￿the￿acquisition￿method.￿The￿cost￿of￿acquisition￿is￿measured
based￿on￿the￿consideration￿transferred￿at￿fair￿value,￿the￿fair￿value￿of￿identifiable￿assets￿distributed￿and￿the￿fair￿value￿of
liabilities￿incurred￿or￿assumed￿at￿the￿acquisition￿date￿(i.e.,￿the￿date￿at￿which￿we￿obtain￿control).￿The￿excess￿of￿the￿costs
of￿an￿acquired￿subsidiary￿over￿the￿net￿of￿the￿amounts￿assigned￿to￿identifiable￿assets￿acquired￿and￿liabilities￿incurred￿or
assumed,￿is￿capitalized￿as￿goodwill.￿Acquisition-related￿costs￿are￿expensed￿when￿incurred￿in￿the￿period￿they￿arise￿or￿the
service￿is￿received.

Variable Interest Entities
We￿assess￿whether￿we￿have￿a￿controlling￿financial￿interest￿in￿any￿VIE￿and,￿thus,￿whether￿we￿are￿the￿VIE’s￿primary
beneficiary.￿ASML￿shall￿be￿deemed￿to￿have￿a￿controlling￿financial￿interest￿in￿a￿VIE￿if￿both￿of￿the￿following￿characteristics
are￿met:￿a)￿the￿power￿to￿direct￿the￿activities￿of￿a￿VIE￿that￿most￿significantly￿impact￿the￿VIE’s￿economic￿performance￿and
b)￿the￿obligation￿to￿absorb￿losses￿of￿the￿VIE￿that￿could￿potentially￿be￿significant￿to￿the￿VIE￿or￿the￿right￿to￿receive￿benefits
from￿the￿VIE￿that￿could￿potentially￿be￿significant￿to￿the￿VIE.￿If￿ASML￿has￿a￿controlling￿financial￿interest￿in￿a￿VIE,￿it￿is
required￿to￿consolidate￿the￿VIE.

Foreign Currency translation
The￿financial￿information￿for￿subsidiaries￿outside￿the￿euro-zone￿is￿generally￿measured￿using￿local￿currencies￿as￿the
functional￿currency.￿The￿Financial￿Statements￿of￿those￿foreign￿subsidiaries￿are￿translated￿into￿euros￿in￿the￿preparation
of￿ASML’s￿consolidated￿Financial￿Statements.￿Assets￿and￿liabilities￿are￿translated￿into￿euros￿at￿the￿exchange￿rate￿on￿the
respective￿balance￿sheet￿dates.￿Income￿and￿costs￿are￿translated￿into￿euros￿based￿on￿the￿average￿exchange￿rate￿for￿the
corresponding￿period.￿The￿resulting￿translation￿adjustments￿are￿recorded￿directly￿in￿shareholders’￿equity.

ASML￿ANNUAL￿REPORT￿2014

F-8

Derivative Financial Instruments
We￿principally￿use￿derivative￿financial￿instruments￿for￿the￿management￿of￿foreign￿currency￿risks￿and￿interest￿rate￿risks.
We￿measure￿all￿derivative￿financial￿instruments￿based￿on￿fair￿values￿derived￿from￿market￿prices￿of￿the￿instruments.￿We
adopt￿hedge￿accounting￿for￿hedges￿that￿are￿highly￿effective￿in￿offsetting￿the￿identified￿hedged￿risks￿taking￿into￿account
required￿effectiveness￿criteria.

Derivatives￿are￿initially￿recognized￿at￿fair￿value￿on￿the￿date￿a￿derivative￿contract￿is￿entered￿into￿and￿are￿subsequently
remeasured.￿The￿method￿of￿recognizing￿the￿resulting￿gain￿or￿loss￿depends￿on￿whether￿the￿derivative￿is￿designated￿as￿a
hedging￿instrument,￿and￿if￿so,￿the￿nature￿of￿the￿item￿being￿hedged.￿We￿designate￿certain￿derivatives￿as￿either:￿
• A￿hedge￿of￿the￿exposure￿to￿changes￿in￿the￿fair￿value￿of￿a￿recognized￿asset￿or￿liability,￿that￿is￿attributable￿to￿a

particular￿risk￿(fair￿value￿hedge);￿or

• A￿hedge￿of￿the￿exposure￿to￿variability￿in￿the￿cash￿flows￿of￿a￿recognized￿asset￿or￿liability,￿or￿of￿a￿forecasted

transaction,￿that￿is￿attributable￿to￿a￿particular￿risk￿(cash￿flow￿hedge).

We￿document￿at￿the￿inception￿of￿the￿transaction￿the￿relationship￿between￿hedging￿instruments￿and￿hedged￿items,￿as
well￿as￿our￿risk￿management￿objectives￿and￿strategy￿for￿undertaking￿various￿hedging￿transactions.￿We￿also￿document
our￿assessment,￿both￿at￿hedge￿inception￿and￿on￿an￿ongoing￿basis,￿of￿whether￿derivatives￿that￿are￿used￿in￿hedging
transactions￿are￿highly￿effective￿in￿offsetting￿changes￿in￿fair￿values￿or￿cash￿flows￿of￿hedged￿items.

Fair Value Hedge
Changes￿in￿the￿fair￿value￿of￿a￿derivative￿financial￿instrument,￿that￿is￿designated￿and￿qualified￿as￿a￿fair￿value￿hedge,
along￿with￿the￿gain￿or￿loss￿on￿the￿hedged￿asset￿or￿liability￿that￿is￿attributable￿to￿the￿hedged￿risk,￿are￿recorded￿in￿the
Consolidated￿Statements￿of￿Operations.

Hedge￿accounting￿is￿discontinued￿when￿we￿revoke￿the￿hedging￿relationship,￿the￿hedging￿instrument￿expires￿or￿is￿sold,
terminated￿or￿exercised,￿or￿no￿longer￿qualifies￿for￿hedge￿accounting.￿The￿adjustment￿to￿the￿carrying￿amount￿of￿the
hedged￿item￿arising￿from￿the￿hedged￿risk￿is￿amortized￿to￿the￿Consolidated￿Statements￿of￿Operations￿from￿that￿date.

Interest￿rate￿swaps￿that￿are￿being￿used￿to￿hedge￿the￿fair￿value￿of￿fixed￿loan￿coupons￿payable￿are￿designated￿as￿fair
value￿hedges.￿The￿change￿in￿fair￿value￿is￿intended￿to￿offset￿the￿change￿in￿the￿fair￿value￿of￿the￿underlying￿fixed￿loan
coupons,￿which￿is￿recorded￿accordingly.￿The￿gain￿or￿loss￿relating￿to￿the￿ineffective￿portion￿of￿interest￿rate￿swaps
hedging￿fixed￿loan￿coupons￿payable￿is￿recognized￿in￿the￿Consolidated￿Statements￿of￿Operations￿as￿interest￿and￿other,
net.

Cash Flow Hedge
Changes￿in￿the￿fair￿value￿of￿a￿derivative￿that￿is￿designated￿and￿qualified￿as￿a￿cash￿flow￿hedge￿are￿recorded￿in￿OCI,￿net￿of
taxes,￿until￿the￿underlying￿hedged￿transaction￿is￿recognized￿in￿the￿Consolidated￿Statements￿of￿Operations.￿In￿the￿event
that￿the￿underlying￿hedge￿transaction￿will￿not￿occur￿within￿the￿specified￿time￿period,￿the￿gain￿or￿loss￿on￿the￿related
cash￿flow￿hedge￿is￿released￿from￿OCI￿and￿included￿in￿the￿Consolidated￿Statements￿of￿Operations,￿unless￿extenuating
circumstances￿exist￿that￿are￿related￿to￿the￿nature￿of￿the￿forecasted￿transaction￿and￿are￿outside￿our￿control￿or￿influence
and￿which￿cause￿the￿forecasted￿transaction￿to￿be￿probable￿of￿occurring￿on￿a￿date￿that￿is￿beyond￿the￿specified￿time
period.

Foreign￿currency￿hedging￿instruments￿that￿are￿being￿used￿to￿hedge￿cash￿flows￿related￿to￿forecasted￿sales￿or￿purchase
transactions￿in￿non-functional￿currencies￿are￿designated￿as￿cash￿flow￿hedges.￿The￿gain￿or￿loss￿relating￿to￿the￿ineffective
portion￿of￿the￿foreign￿currency￿hedging￿instruments￿is￿recognized￿in￿the￿Consolidated￿Statements￿of￿Operations￿in￿net
sales￿or￿cost￿of￿sales.

Interest￿rate￿swaps￿that￿are￿being￿used￿to￿hedge￿changes￿in￿the￿variability￿of￿future￿interest￿cash￿flows￿to￿certain￿of
our￿operating￿lease￿obligations￿are￿designated￿as￿cash￿flow￿hedges.￿The￿changes￿in￿fair￿value￿of￿the￿derivatives￿are
intended￿to￿offset￿changes￿in￿future￿interest￿cash￿flows￿of￿such￿operating￿lease￿obligations.￿The￿gain￿or￿loss￿relating
to￿the￿ineffective￿portion￿of￿interest￿rate￿swaps￿hedging￿the￿variability￿of￿future￿interest￿cash￿flows￿is￿recognized￿in￿the
Consolidated￿Statements￿of￿Operations￿as￿interest￿and￿other,￿net.

Cash and Cash Equivalents
Cash￿and￿cash￿equivalents￿consist￿primarily￿of￿highly￿liquid￿investments,￿such￿as￿bank￿deposits,￿money￿market￿funds
and￿interest-bearing￿bank￿accounts￿with￿insignificant￿interest￿rate￿risk￿and￿remaining￿maturities￿of￿three￿months￿or￿less
at￿the￿date￿of￿acquisition.

ASML￿ANNUAL￿REPORT￿2014

F-9

Short-term Investments
Investments￿with￿remaining￿maturities￿longer￿than￿three￿months￿and￿less￿than￿one￿year￿at￿the￿date￿of￿acquisition￿are
presented￿as￿short-term￿investments.￿The￿short-term￿investments￿are￿classified￿as￿available-for-sale￿securities￿and
are￿stated￿at￿fair￿value.￿Gains￿and￿losses,￿other￿than￿impairments,￿interest￿income￿and￿foreign￿exchange￿results,￿are
recognized￿in￿OCI￿until￿the￿short-term￿investments￿are￿derecognized.￿Upon￿derecognition,￿the￿cumulative￿gain￿or￿loss
recognized￿in￿OCI,￿is￿recognized￿in￿the￿Consolidated￿Statements￿of￿Operations.

Inventories
Inventories￿are￿stated￿at￿the￿lower￿of￿cost￿(applying￿the￿first-in,￿first-out￿method)￿or￿market￿value.￿Cost￿includes￿net
prices￿paid￿for￿materials￿purchased,￿charges￿for￿freight￿and￿customs￿duties,￿production￿labor￿cost￿and￿factory￿overhead.
Allowances￿are￿made￿for￿slow-moving,￿obsolete￿or￿unsellable￿inventory.

Allowances￿for￿inventory￿are￿determined￿based￿on￿the￿expected￿demand￿which￿is￿derived￿from￿sales￿forecasts￿as￿well￿as
the￿expected￿market￿value￿of￿the￿inventory.

Intangible Assets
Goodwill
Goodwill￿represents￿the￿excess￿of￿the￿costs￿of￿an￿acquisition￿over￿the￿fair￿value￿of￿the￿amounts￿assigned￿to￿assets
acquired￿and￿liabilities￿incurred￿or￿assumed￿of￿the￿acquired￿subsidiary￿at￿the￿date￿of￿acquisition.￿Goodwill￿on￿acquisition
of￿subsidiaries￿is￿allocated￿to￿RUs￿for￿the￿purpose￿of￿impairment￿testing.￿The￿allocation￿is￿made￿to￿those￿RUs￿that
are￿expected￿to￿benefit￿from￿the￿business￿combination￿in￿which￿the￿goodwill￿arose.￿Goodwill￿is￿tested￿for￿impairment
annually￿at￿the￿start￿of￿the￿fourth￿quarter￿and￿whenever￿events￿or￿changes￿in￿circumstances￿indicate￿that￿the￿carrying
amount￿of￿the￿goodwill￿may￿not￿be￿recoverable.￿Goodwill￿is￿stated￿at￿cost￿less￿accumulated￿impairment￿losses.

Other Intangible Assets
Other￿intangible￿assets￿include￿brands,￿intellectual￿property,￿developed￿technology,￿customer￿relationships,￿in-process
R&D￿and￿other￿intangible￿assets.￿Other￿intangible￿assets￿are￿stated￿at￿cost,￿less￿accumulated￿amortization￿and
accumulated￿impairment￿losses￿(for￿the￿amount￿exceeding￿goodwill).￿Amortization￿is￿calculated￿using￿the￿straight-line
method￿based￿on￿the￿estimated￿useful￿lives￿of￿the￿assets.￿The￿following￿table￿presents￿the￿estimated￿useful￿lives￿of￿our
finite-lived￿other￿intangible￿assets:

Category
Brands
Intellectual￿property
Developed￿technology
Customer￿relationships
Other

Estimated useful life
20￿years
3-10￿years
6-15￿years
8-18￿years
2-6￿years

Property, Plant and Equipment
Property,￿plant￿and￿equipment￿are￿stated￿at￿cost,￿less￿accumulated￿depreciation￿and￿accumulated￿impairment￿losses.
Costs￿of￿assets￿manufactured￿by￿ASML￿include￿direct￿manufacturing￿costs,￿production￿overhead￿and￿interest￿costs
incurred￿for￿qualifying￿assets￿during￿the￿construction￿period.￿Depreciation￿is￿calculated￿using￿the￿straight-line￿method
based￿on￿the￿estimated￿useful￿lives￿of￿the￿related￿assets.￿In￿the￿case￿of￿leasehold￿improvements,￿the￿estimated￿useful
lives￿of￿the￿related￿assets￿do￿not￿exceed￿the￿remaining￿term￿of￿the￿corresponding￿lease.

The￿following￿table￿presents￿the￿estimated￿useful￿lives￿of￿our￿property,￿plant￿and￿equipment:

Category
Buildings￿and￿constructions
Machinery￿and￿equipment
Leasehold￿improvements
Furniture,￿fixtures￿and￿other￿equipment

Estimated useful life
5￿-￿45￿years
2￿-￿5￿years
5￿-￿10￿years
3￿-￿5￿years

Land￿is￿not￿depreciated.

Certain￿costs￿associated￿with￿the￿use￿of￿software￿are￿capitalized.￿These￿costs￿are￿depreciated￿on￿a￿straight-line￿basis
over￿the￿period￿of￿related￿benefit,￿which￿ranges￿primarily￿from￿three￿to￿five￿years.

ASML￿ANNUAL￿REPORT￿2014

F-10

Evaluation of Long-lived Assets for Impairment
Long-lived￿assets￿include￿goodwill,￿other￿intangible￿assets￿and￿property,￿plant￿and￿equipment.

Goodwill￿is￿tested￿for￿impairment￿annually￿at￿the￿start￿of￿the￿fourth￿quarter￿and￿whenever￿events￿or￿changes￿in
circumstances￿indicate￿that￿the￿carrying￿amount￿of￿the￿goodwill￿may￿not￿be￿recoverable.￿These￿events￿or￿circumstances
could￿include￿a￿significant￿change￿in￿the￿business￿climate,￿legal￿factors,￿operating￿performance￿indicators,￿competition,
or￿sale￿or￿disposition￿of￿a￿significant￿portion￿of￿a￿RU.￿This￿test￿is￿based￿on￿a￿two-step￿approach￿for￿each￿RU￿(being
an￿operating￿segment￿or￿one￿level￿below￿an￿operating￿segment)￿in￿which￿goodwill￿has￿been￿recorded.￿To￿determine
whether￿it￿is￿necessary￿to￿perform￿this￿two-step￿approach￿we￿may￿first￿assess￿qualitative￿factors.￿If￿we￿determine￿that
it￿is￿more￿likely￿than￿not￿(a￿likelihood￿of￿more￿than￿50￿percent)￿that￿the￿fair￿value￿of￿a￿RU￿is￿less￿than￿its￿carrying￿amount
(including￿goodwill),￿the￿two-step￿impairment￿test￿is￿performed.￿In￿the￿first￿step,￿the￿recoverability￿of￿goodwill￿is￿tested
by￿comparing￿the￿carrying￿amount￿of￿the￿RU￿including￿goodwill￿with￿the￿fair￿value￿of￿the￿RU.￿If￿the￿carrying￿amount￿of
the￿RU￿is￿higher￿than￿the￿fair￿value￿of￿the￿RU,￿the￿second￿step￿should￿be￿performed.￿Goodwill￿impairment￿is￿measured
as￿the￿excess￿of￿the￿carrying￿amount￿of￿the￿goodwill￿over￿its￿implied￿fair￿value.￿The￿implied￿fair￿value￿of￿goodwill￿is
determined￿by￿calculating￿the￿fair￿value￿of￿the￿various￿assets￿and￿liabilities￿included￿in￿the￿RU￿in￿the￿same￿manner￿as
goodwill￿is￿determined￿in￿a￿business￿combination.￿Any￿excess￿of￿the￿carrying￿amount￿over￿the￿implied￿fair￿value￿is
recognized￿as￿an￿impairment￿loss.

Indefinite-lived￿other￿intangibles￿assets￿are￿tested￿for￿impairment￿annually￿at￿the￿start￿of￿the￿fourth￿quarter￿and
whenever￿events￿or￿changes￿in￿circumstances￿indicate￿that￿the￿carrying￿amount￿of￿the￿indefinite-lived￿other￿intangible
assets￿may￿not￿be￿recoverable.￿To￿determine￿whether￿it￿is￿necessary￿to￿perform￿a￿quantitative￿test,￿we￿may￿first￿assess
qualitative￿factors.￿If￿we￿determine￿that￿it￿is￿more￿likely￿than￿not￿(a￿likelihood￿of￿more￿than￿50￿percent)￿that￿the￿fair
value￿of￿the￿asset￿is￿less￿than￿its￿carrying￿amount,￿the￿quantitative￿test￿is￿performed.￿We￿have￿an￿unconditional￿option
to￿bypass￿the￿qualitative￿assessment￿for￿any￿indefinite-lived￿intangible￿asset￿in￿any￿period￿and￿proceed￿directly￿to
performing￿the￿quantitative￿impairment￿test.￿The￿quantitative￿impairment￿test￿for￿indefinite-lived￿other￿intangible￿assets
consists￿of￿a￿comparison￿of￿the￿fair￿value￿of￿these￿assets￿with￿their￿carrying￿amounts.￿Any￿excess￿of￿the￿carrying
amount￿over￿the￿fair￿value￿is￿recognized￿as￿an￿impairment￿loss.

Finite-lived￿other￿intangible￿assets￿and￿property,￿plant￿and￿equipment￿are￿reviewed￿for￿impairment￿whenever￿events￿or
changes￿in￿circumstances￿indicate￿that￿the￿carrying￿amount￿of￿those￿assets￿may￿not￿be￿recoverable.￿An￿impairment
loss￿is￿recognized￿only￿if￿the￿carrying￿amount￿of￿finite-lived￿other￿intangible￿assets￿and￿property,￿plant￿and￿equipment
is￿not￿recoverable￿and￿exceeds￿its￿fair￿value.￿The￿carrying￿amount￿is￿not￿recoverable￿if￿it￿exceeds￿the￿sum￿of￿the
(un)discounted￿forecasted￿cash￿flows￿to￿result￿from￿the￿use￿and￿eventual￿disposition￿of￿such￿asset.￿An￿impairment￿loss
is￿measured￿as￿the￿amount￿by￿which￿the￿carrying￿amount￿exceeds￿its￿fair￿value.

In￿determining￿the￿fair￿value￿of￿long-lived￿assets,￿we￿make￿estimates￿about￿future￿cash￿flows.￿These￿estimates￿are￿based
on￿our￿strategic￿plan￿updated￿with￿the￿latest￿available￿projections￿of￿the￿semiconductor￿industry￿and￿our￿income￿and
cost￿expectations,￿which￿are￿consistent￿with￿the￿plans￿and￿estimates￿that￿we￿use￿to￿manage￿our￿business.￿We￿also
make￿estimates￿and￿assumptions￿concerning￿our￿WACC.￿It￿is￿possible￿that￿actual￿results￿may￿differ￿from￿our￿plans,
estimates￿and￿assumptions.￿Future￿adverse￿changes￿in￿market￿conditions￿may￿also￿require￿impairment￿of￿certain￿long-
lived￿assets,￿which￿could￿have￿a￿material￿adverse￿effect￿on￿our￿financial￿condition￿and￿results￿of￿operations.

Provisions
Provisions￿for￿lease￿contract￿termination￿costs￿are￿recognized￿when￿costs￿will￿continue￿to￿be￿incurred￿under￿a￿contract
for￿its￿remaining￿term￿without￿economic￿benefit￿to￿us￿and￿we￿cease￿using￿the￿rights￿conveyed￿by￿the￿contract.￿The
provisions￿are￿measured￿at￿fair￿value,￿which￿for￿an￿operating￿lease￿contract￿is￿determined￿based￿on￿the￿remaining￿lease
payments￿reduced￿by￿the￿estimated￿sublease￿payments￿that￿could￿be￿reasonably￿obtained.

Revenue Recognition
ASML￿recognizes￿revenue￿when￿all￿four￿revenue￿recognition￿criteria￿are￿met:￿persuasive￿evidence￿of￿an￿arrangement
exists;￿delivery￿has￿occurred￿or￿services￿have￿been￿rendered;￿seller’s￿price￿to￿buyer￿is￿fixed￿or￿determinable;￿and
collectability￿is￿reasonably￿assured.￿At￿ASML￿this￿policy￿generally￿results￿in￿revenue￿recognition￿from￿the￿sale￿of￿a
system￿upon￿shipment.￿The￿revenue￿from￿the￿installation￿of￿a￿system￿is￿generally￿recognized￿upon￿completion￿of
that￿installation￿at￿the￿customer￿site.￿Prior￿to￿shipment,￿systems￿undergo￿a￿FAT￿in￿our￿cleanroom￿facilities,￿effectively
replicating￿the￿operating￿conditions￿that￿will￿be￿present￿on￿the￿customer's￿site,￿in￿order￿to￿verify￿whether￿the￿system￿will
meet￿its￿standard￿specifications￿and￿any￿additional￿technical￿and￿performance￿criteria￿agreed￿with￿the￿customer,￿if￿any.
A￿system￿is￿shipped,￿and￿revenue￿is￿recognized,￿only￿after￿all￿contractual￿specifications￿are￿met￿and￿customer￿sign-off
is￿received￿or￿waived.￿In￿case￿not￿all￿specifications￿are￿met￿and￿the￿remaining￿performance￿obligation￿is￿not￿essential￿to
the￿functionality￿of￿the￿system￿but￿is￿substantive￿rather￿than￿inconsequential￿or￿perfunctory,￿a￿portion￿of￿the￿sales￿price
is￿deferred.￿Although￿each￿system's￿performance￿is￿re-tested￿upon￿installation￿at￿the￿customer's￿site,￿we￿have￿never
failed￿to￿successfully￿complete￿installation￿of￿a￿system￿at￿a￿customer’s￿premises.

ASML￿ANNUAL￿REPORT￿2014

F-11

In￿connection￿with￿the￿introduction￿of￿new￿technology,￿such￿as￿NXE:3300B,￿we￿initially￿defer￿revenue￿recognition￿until
acceptance￿of￿the￿new￿technology￿based￿system￿and￿completion￿of￿installation￿at￿the￿customer's￿premises. As￿our
systems￿are￿based￿largely￿on￿two￿product￿platforms￿that￿permit￿incremental,￿modular￿upgrades,￿the￿introduction￿of
genuinely￿"new"￿technology￿occurs￿infrequently,￿and￿in￿the￿past￿15￿years,￿has￿occurred￿on￿only￿two￿occasions:￿2000
(TWINSCAN)￿and￿2010￿(EUV).

We￿have￿no￿significant￿repurchase￿commitments￿in￿our￿general￿sales￿terms￿and￿conditions.￿From￿time￿to￿time￿we
repurchase￿systems￿that￿we￿have￿manufactured￿and￿sold￿and,￿following￿refurbishment,￿we￿resell￿those￿systems￿to
other￿customers.￿This￿repurchase￿decision￿is￿mainly￿driven￿by￿market￿demand￿expressed￿by￿other￿customers￿and￿less
frequently￿by￿explicit￿or￿implicit￿contractual￿arrangements￿relating￿to￿the￿initial￿sale.￿We￿consider￿reasonable￿offers￿from
any￿vendor,￿including￿customers,￿to￿repurchase￿used￿systems￿so￿that￿we￿can￿refurbish,￿resell,￿and￿install￿these￿systems
as￿part￿of￿our￿normal￿business￿operations.￿Once￿repurchased,￿the￿repurchase￿price￿of￿the￿used￿system￿is￿recorded￿in
work-in-process￿inventory￿during￿the￿period￿it￿is￿being￿refurbished,￿following￿which￿the￿refurbished￿system￿is￿reflected￿in
finished￿products￿inventory￿until￿it￿is￿sold￿to￿the￿customer.￿As￿of￿December￿31,￿2014￿and￿2013,￿ASML￿had￿no￿repurchase
commitments.

We￿offer￿customers￿discounts￿in￿the￿normal￿course￿of￿sales￿negotiations.￿These￿discounts￿are￿directly￿deducted
from￿the￿gross￿sales￿price￿at￿the￿moment￿of￿revenue￿recognition.￿From￿time￿to￿time,￿we￿offer￿free￿or￿discounted
products￿or￿services￿(award￿credits)￿to￿our￿customers￿as￿part￿of￿a￿volume￿purchase￿agreement.￿In￿some￿instances
these￿volume￿discounts￿can￿be￿used￿to￿purchase￿field￿options￿(system￿enhancements).￿The￿related￿amount￿is￿recorded
as￿a￿reduction￿in￿net￿sales￿at￿time￿of￿system￿shipment.￿The￿sales￿transaction￿that￿gives￿rise￿to￿these￿award￿credits￿is
accounted￿for￿as￿a￿multiple￿element￿sales￿transaction￿as￿the￿agreements￿involve￿the￿delivery￿of￿multiple￿products.￿The
consideration￿received￿from￿the￿sales￿transaction￿is￿allocated￿between￿the￿award￿credits￿and￿the￿other￿elements￿of￿the
sales￿transaction.￿The￿consideration￿allocated￿to￿the￿award￿credits￿is￿recognized￿as￿deferred￿revenue￿until￿award￿credits
are￿delivered￿to￿the￿customer￿or￿earned.￿The￿amount￿allocable￿to￿a￿delivered￿item￿is￿limited￿to￿the￿amount￿that￿is￿not
contingent￿upon￿the￿delivery￿of￿additional￿items￿or￿meeting￿other￿specified￿performance￿conditions￿(the￿non-contingent
amount).

Net￿sales￿are￿recognized￿excluding￿the￿taxes￿levied￿on￿sales￿(net￿basis).

In￿the￿event￿of￿expected￿losses￿on￿executory￿contracts,￿we￿recognize￿a￿liability￿for￿the￿amount￿that￿the￿cost￿of￿settling
the￿contract￿exceeds￿the￿amount￿of￿the￿contract￿price.￿When￿we￿satisfy￿these￿contracts,￿we￿utilize￿the￿related￿liability.

Multiple-Element Arrangements
The￿main￿portion￿of￿our￿net￿sales￿is￿derived￿from￿contractual￿arrangements￿with￿our￿customers￿that￿have￿multiple
deliverables,￿which￿mainly￿include￿the￿sale￿of￿our￿systems,￿installation￿and￿training￿services￿and￿extended￿and￿enhanced
(optic)￿warranty￿contracts.￿As￿of￿January￿1,￿2011,￿we￿adopted￿ASU￿2009-13￿"Sales￿Arrangements￿with￿Multiple
Deliverables"￿which￿converted￿into￿ASC￿605-25￿"Revenue￿Recognition￿-￿Multiple-Element￿Arrangements".￿The￿amended
standard￿changes￿the￿requirements￿for￿establishing￿separate￿units￿of￿accounting￿in￿a￿multiple￿element￿arrangement￿and
requires￿the￿allocation￿of￿arrangement￿consideration￿to￿each￿deliverable￿to￿be￿based￿on￿the￿relative￿selling￿price.

Each￿element￿in￿the￿arrangement￿is￿accounted￿for￿as￿a￿separate￿unit￿of￿accounting￿provided￿the￿following￿criteria￿are
met:￿i)￿the￿delivered￿products￿or￿services￿have￿value￿to￿the￿customer￿on￿a￿standalone￿basis;￿and￿ii)￿for￿an￿arrangement
that￿includes￿a￿general￿right￿of￿return￿relative￿to￿the￿delivered￿products￿or￿services,￿delivery￿or￿performance￿of￿the
undelivered￿product￿or￿service￿is￿considered￿probable￿and￿is￿substantially￿controlled￿by￿us.￿We￿consider￿a￿deliverable
to￿have￿stand-alone￿value￿if￿the￿product￿or￿service￿is￿sold￿separately￿by￿us￿or￿another￿vendor￿or￿could￿be￿resold￿by￿the
customer.￿Further,￿our￿sales￿arrangements￿do￿not￿include￿a￿general￿right￿of￿return￿relative￿to￿the￿delivered￿products.
Where￿the￿aforementioned￿criteria￿for￿a￿separate￿unit￿of￿accounting￿are￿not￿met,￿the￿deliverable￿is￿combined￿with￿the
undelivered￿element(s)￿and￿treated￿as￿a￿single￿unit￿of￿accounting￿for￿the￿purposes￿of￿allocation￿of￿the￿arrangement
consideration￿and￿revenue￿recognition.

The￿hierarchy￿of￿evidence￿to￿determine￿a￿selling￿price￿in￿ASC￿605-25￿is￿as￿follows:
• VSOE￿–￿The￿price￿at￿which￿we￿sell￿the￿element￿in￿a￿separate￿stand-alone￿transaction;
• TPE￿–￿Evidence￿from￿us￿or￿other￿companies￿of￿the￿value￿of￿a￿largely￿interchangeable￿element￿in￿a￿transaction;
• BESP￿–￿Our￿best￿estimate￿of￿the￿selling￿price￿of￿an￿element￿in￿the￿transaction.

ASML￿ANNUAL￿REPORT￿2014

F-12

To￿determine￿the￿selling￿price￿in￿multiple￿element￿arrangements,￿we￿establish￿VSOE￿of￿the￿selling￿price￿for￿installation,
training￿services￿and￿extended￿and￿enhanced￿(optic)￿warranty￿contracts.￿VSOE￿for￿installation￿is￿determined￿based￿on
the￿prices￿that￿we￿charge￿for￿billable￿labor￿and￿materials￿consumed￿in￿comparable￿services￿(such￿as￿relocating￿a￿system
to￿another￿customer￿site).￿VSOE￿for￿extended￿and￿enhanced￿(optic)￿warranty￿contracts￿is￿determined￿on￿the￿basis￿of
equivalent￿products￿we￿sell￿on￿a￿standalone￿basis,￿such￿as￿full￿service￿contracts￿and￿billable￿lens￿swaps,￿and￿which￿are
subject￿to￿normal￿price￿negotiations.￿Revenue￿from￿installation￿and￿training￿services￿is￿recognized￿when￿the￿services￿are
completed.￿Revenue￿from￿extended￿and￿enhanced￿(optic)￿warranty￿contracts￿is￿recognized￿over￿the￿term￿of￿the￿contract.
When￿we￿are￿unable￿to￿establish￿the￿selling￿price￿using￿VSOE￿or￿TPE,￿we￿use￿BESP.￿The￿objective￿of￿using￿estimated
selling￿price-based￿methodology￿is￿to￿determine￿the￿price￿at￿which￿we￿would￿transact￿a￿sale￿if￿the￿product￿or￿service
were￿sold￿on￿a￿stand-alone￿basis.￿Accordingly,￿we￿determine￿BESP￿considering￿several￿internal￿and￿external￿factors
including,￿but￿not￿limited￿to,￿pricing￿practices,￿gross￿margin￿objectives,￿market￿conditions,￿competitive￿environment,
internal￿costs￿and￿geographies.

For￿our￿NXE:3300B￿systems,￿we￿are￿unable￿to￿determine￿VSOE￿for￿extended,￿enhanced￿(optic)￿warranty￿contracts￿and
installation.￿We￿determined￿for￿NXE:3300B￿systems￿that￿BESP￿is￿the￿appropriate￿reference￿in￿the￿fair￿value￿hierarchy￿for
extended￿and￿enhanced￿(optic)￿warranty￿contracts.￿We￿review￿selling￿prices￿periodically￿and￿maintain￿internal￿controls
over￿the￿establishment￿and￿updates￿of￿these￿elements.

Lease Arrangements
A￿lease￿is￿classified￿as￿a￿sales-type￿lease￿if￿any￿of￿the￿following￿lease￿classification￿criteria￿is￿met￿at￿its￿inception:
1. The￿lease￿transfers￿ownership￿of￿the￿property￿to￿the￿lessee￿by￿the￿end￿of￿the￿lease￿term;
2. The￿lease￿contains￿a￿bargain￿purchase￿option;
3. The￿lease￿term￿is￿equal￿to￿75￿percent￿or￿more￿of￿the￿estimated￿economic￿life￿of￿the￿leased￿property;￿or
4. The￿present￿value￿at￿the￿beginning￿of￿the￿lease￿term￿of￿the￿minimum￿lease￿payments,￿excluding￿that￿portion￿of

the￿payments￿representing￿executory￿costs￿such￿as￿insurance,￿maintenance,￿and￿taxes￿to￿be￿paid￿by￿the￿lessor,
including￿any￿profit￿thereon,￿equals￿or￿exceeds￿90￿percent￿of￿the￿excess￿of￿the￿fair￿value￿of￿the￿leased￿property
to￿the￿lessee￿at￿lease￿inception￿over￿any￿related￿investment￿tax￿credit￿retained￿by￿the￿lessor￿and￿expected￿to￿be
realized￿by￿the￿lessor.

Revenue￿is￿recognized￿at￿commencement￿of￿the￿lease￿term￿of￿a￿sales-type￿lease.￿The￿present￿value￿of￿the￿lease
payments￿is￿recognized￿as￿a￿finance￿receivable.￿The￿difference￿between￿the￿gross￿receivable￿and￿the￿present￿value￿of
the￿receivable￿is￿recognized￿as￿unearned￿interest￿in￿the￿Consolidated￿Statements￿of￿Operations.

A￿lease￿is￿classified￿as￿an￿operating￿lease￿if￿the￿lease￿classification￿criteria￿(as￿described￿above)￿are￿not￿met.￿If￿ASML
has￿offered￿its￿customers￿an￿operating￿lease￿arrangement,￿the￿contract￿consideration￿is￿recognized￿in￿the￿Consolidated
Statements￿of￿Operations￿on￿a￿straight-line￿basis￿over￿the￿period￿of￿the￿lease.

Warranty
We￿provide￿standard￿warranty￿coverage￿on￿our￿systems￿for￿12￿months￿and￿on￿certain￿optic￿parts￿for￿60￿months,
providing￿labor￿and￿parts￿necessary￿to￿repair￿systems￿during￿the￿warranty￿period.￿The￿estimated￿warranty￿costs￿are
accounted￿for￿by￿accruing￿these￿costs￿for￿each￿system￿upon￿recognition￿of￿the￿system￿sale.￿The￿estimated￿warranty
costs￿are￿based￿on￿historical￿product￿performance￿and￿service￿records.￿We￿calculate￿the￿charge￿of￿average￿service
hours￿and￿parts￿per￿system￿to￿determine￿the￿estimated￿warranty￿costs.￿On￿a￿semi-annual￿basis,￿we￿assess,￿and￿update
if￿necessary,￿our￿accounting￿estimates￿used￿to￿calculate￿the￿standard￿warranty.
The￿extended￿and￿enhanced￿(optic)￿warranty￿on￿our￿systems￿is￿accounted￿for￿as￿a￿separate￿element￿of￿multiple￿element
revenue￿recognition￿transactions.

Customer Co-Investment Program
In￿connection￿with￿the￿CCIP,￿we￿entered￿into￿investment￿agreements,￿Shareholders￿Agreements,￿NRE￿Funding
Agreements￿and￿a￿commercial￿agreement￿with￿Participating￿Customers.

The￿investment￿agreements,￿Shareholder￿Agreements,￿NRE￿Funding￿Agreements￿and￿commercial￿agreement￿are
accounted￿for￿as￿a￿multiple-element￿arrangement￿with￿each￿of￿the￿Participating￿Customers.￿Based￿upon￿ASC￿605-25
Multiple-Element￿Arrangements￿guidance,￿the￿following￿two￿separate￿elements￿are￿identified:￿(1)￿the￿share￿issuance
(governed￿by￿the￿investment￿agreements￿and￿the￿Shareholder￿Agreements)￿and￿(2)￿the￿NRE￿funding￿and￿commercial
discounts￿and￿credits￿(governed￿by￿the￿NRE￿Funding￿Agreements￿and￿the￿commercial￿agreement￿with￿Intel).

ASML￿ANNUAL￿REPORT￿2014

F-13

The￿shares￿issued￿to￿the￿Participating￿Customers￿are￿recorded￿at￿fair￿value￿based￿on￿quoted￿share￿prices￿(EUR￿3,977.4
million)￿with￿the￿remaining￿aggregate￿arrangement￿consideration￿allocated￿to￿the￿NRE￿funding￿and￿commercial￿discounts
and￿credits.￿The￿difference￿between￿the￿fair￿value￿of￿the￿shares￿and￿the￿subscription￿price￿of￿the￿shares￿(EUR￿39.91)
was￿recorded￿as￿a￿deduction￿from￿shareholders’￿equity￿upon￿issuance￿of￿the￿shares￿(EUR￿123.4￿million).￿Shareholders’
equity￿is￿increased￿to￿the￿fair￿value￿of￿the￿shares￿as￿the￿portion￿of￿the￿NRE￿funding￿allocable￿to￿the￿shares￿is￿received
over￿the￿NRE￿funding￿period￿(2013-2017).￿The￿amounts￿are￿deemed￿receivables￿from￿the￿Participating￿Customers￿in
their￿capacity￿as￿shareholders￿of￿ASML.

A￿significant￿related￿party￿relationship￿exists￿between￿ASML￿and￿Intel￿as￿a￿result￿of￿the￿equity￿investment￿made￿by
Intel￿as￿part￿of￿the￿CCIP.￿Based￿on￿the￿commercial￿discounts￿and￿credits￿(governed￿by￿the￿Commercial￿Agreement￿with
Intel)￿and￿the￿significant￿related￿party￿relationship,￿all￿NRE￿funding￿from￿Intel￿will￿be￿deferred￿and￿recognized￿in￿the
Consolidated￿Statement￿of￿Operations￿only￿when￿the￿commercial￿discounts￿and￿credits￿are￿earned.

In￿addition￿see￿also￿other￿income￿for￿further￿explanation￿on￿the￿accounting￿policies￿with￿respect￿to￿CCIP.

Accounting for Shipping and Handling Fees and Costs
ASML￿bills￿the￿customer￿for,￿and￿recognizes￿as￿net￿sales,￿any￿charges￿for￿shipping￿and￿handling￿costs.￿The￿related￿costs
are￿recognized￿as￿cost￿of￿sales.

Cost of Sales
Cost￿of￿system￿sales￿and￿field￿option￿sales￿comprise￿direct￿product￿costs￿such￿as￿materials,￿labor,￿cost￿of￿warranty,
depreciation,￿shipping￿and￿handling￿costs￿and￿related￿overhead￿costs.

Costs￿of￿service￿sales￿comprise￿direct￿service￿costs￿such￿as￿materials,￿labor,￿depreciation￿and￿overhead￿costs.

Other Income
The￿portion￿of￿the￿NRE￿funding￿from￿TSMC￿and￿Samsung￿not￿allocable￿to￿the￿shares￿issued￿to￿those￿Participating
Customers￿under￿the￿CCIP￿is￿recognized￿in￿other￿income￿when￿the￿R&D￿costs￿relating￿to￿lithography￿projects￿are
recognized￿over￿the￿NRE￿funding￿period￿(2013-2017).

R&D Costs and Credits
Costs￿relating￿to￿R&D￿are￿charged￿to￿operating￿expenses￿as￿incurred.￿ASML￿receives￿subsidies￿and￿other￿grants￿from
several￿Dutch￿and￿international￿(inter-)governmental￿institutes￿('government￿grants').￿These￿government￿grants￿that
cover￿R&D￿costs￿relating￿to￿approved￿projects￿are￿recorded￿as￿R&D￿credits￿in￿the￿R&D￿costs￿in￿the￿Consolidated
Statements￿of￿Operations.

Government￿grants￿are￿not￿recognized￿until￿there￿is￿reasonable￿assurance￿that￿ASML￿will￿comply￿with￿the￿conditions
and￿that￿the￿grants￿will￿be￿received.￿

Government￿grants￿that￿are￿received￿as￿compensation￿for￿expenses￿or￿losses￿already￿incurred,￿or￿for￿the￿purpose￿of
giving￿immediate￿financial￿support￿to￿ASML￿with￿no￿future￿related￿costs￿are￿recognized￿in￿the￿Consolidated￿Statements
of￿Operations￿in￿the￿period￿in￿which￿they￿become￿receivable.￿

Borrowing Costs
Borrowing￿costs￿directly￿attributable￿to￿the￿acquisition,￿construction￿or￿production￿of￿qualifying￿assets,￿which￿are￿assets
that￿necessarily￿take￿a￿substantial￿period￿of￿time￿to￿get￿ready￿for￿their￿intended￿use￿or￿sale,￿are￿added￿to￿the￿cost￿of
those￿assets,￿until￿such￿time￿that￿the￿assets￿are￿substantially￿ready￿for￿their￿intended￿use￿or￿sale.

Share-based Payments
Compensation￿expenses￿in￿relation￿to￿share-based￿payments￿are￿recognized￿based￿upon￿the￿grant-date￿fair￿value
of￿stock￿options￿and￿shares.￿The￿grant-date￿fair￿value￿of￿stock￿options￿is￿estimated￿using￿a￿Black-Scholes￿option
valuation￿model.￿This￿Black-Scholes￿model￿requires￿the￿use￿of￿assumptions,￿including￿expected￿share￿price￿volatility,
the￿estimated￿life￿of￿each￿award￿and￿the￿estimated￿dividend￿yield.￿The￿risk-free￿interest￿rate￿used￿in￿the￿model￿is
determined,￿based￿on￿an￿index￿populated￿with￿euro-denominated￿European￿government￿agency￿bond￿with￿high￿credit
ratings￿and￿with￿a￿life￿equal￿to￿the￿expected￿life￿of￿the￿equity-settled￿share-based￿payments.￿The￿grant-date￿fair￿value￿of
shares￿is￿determined￿based￿on￿the￿closing￿price￿of￿our￿shares￿listed￿at￿Euronext￿Amsterdam￿on￿the￿grant-date.

ASML￿ANNUAL￿REPORT￿2014

F-14

The￿grant-date￿fair￿value￿of￿the￿equity-settled￿share-based￿payments￿is,￿based￿on￿the￿terms￿and￿conditions,￿expensed
over￿the￿vesting￿period,￿based￿on￿our￿estimate￿of￿equity￿instruments￿that￿will￿eventually￿vest.￿At￿each￿balance￿sheet
date,￿we￿revise￿our￿estimate￿of￿the￿number￿of￿equity￿instruments￿expected￿to￿vest.￿The￿impact￿of￿the￿revision￿of￿the
original￿estimates,￿if￿any,￿is￿recognized￿in￿the￿Consolidated￿Statements￿of￿Operations￿in￿the￿period￿in￿which￿the￿revision
is￿determined,￿with￿a￿corresponding￿adjustment￿to￿shareholders'￿equity.

Income Taxes
The￿asset￿and￿liability￿method￿is￿used￿in￿accounting￿for￿income￿taxes.￿Under￿this￿method,￿deferred￿tax￿assets￿and
liabilities￿are￿recognized￿for￿the￿tax￿effect￿of￿incurred￿net￿operating￿losses￿and￿for￿tax￿consequences￿attributable￿to
differences￿between￿the￿balance￿sheet￿carrying￿amounts￿of￿existing￿assets￿and￿liabilities￿and￿their￿respective￿tax￿bases.
If￿it￿is￿more￿likely￿than￿not￿that￿the￿carrying￿amounts￿of￿deferred￿tax￿assets￿will￿not￿be￿realized,￿a￿valuation￿allowance￿is
recorded￿for￿the￿differences.

Deferred￿tax￿assets￿and￿liabilities￿are￿measured￿using￿enacted￿tax￿rates￿expected￿to￿apply￿to￿taxable￿income￿in￿the
years￿in￿which￿temporary￿differences￿are￿expected￿to￿be￿recovered￿or￿settled.￿The￿effect￿on￿deferred￿tax￿assets￿and
liabilities￿of￿a￿change￿in￿tax￿rates￿is￿recognized￿in￿the￿Consolidated￿Statements￿of￿Operations￿in￿the￿period￿that￿includes
the￿enactment￿date.

We￿recognize￿liabilities￿for￿uncertain￿tax￿positions￿based￿on￿a￿two-step￿process.￿The￿first￿step￿is￿to￿evaluate￿the￿tax
position￿for￿recognition￿by￿determining￿if￿the￿weight￿of￿available￿evidence￿indicates￿that￿it￿is￿more￿likely￿than￿not￿that
the￿position￿will￿be￿sustained￿on￿audit,￿including￿resolution￿of￿related￿appeals￿or￿litigation￿processes,￿if￿any.￿The￿second
step￿is￿to￿measure￿the￿tax￿benefit￿as￿the￿largest￿amount￿that￿is￿more￿than￿50￿percent￿likely￿of￿being￿realized￿upon
settlement.￿While￿we￿believe￿we￿have￿appropriate￿support￿for￿the￿positions￿taken￿on￿our￿tax￿returns,￿we￿regularly￿assess
the￿potential￿outcomes￿of￿examinations￿by￿tax￿authorities￿in￿determining￿the￿adequacy￿of￿our￿provision￿for￿income￿taxes,
and￿adjust￿the￿income￿tax￿provision,￿income￿taxes￿payable￿and￿deferred￿taxes￿in￿the￿period￿in￿which￿the￿facts￿that￿give
rise￿to￿a￿revision￿become￿known.

Contingencies and Litigation
In￿connection￿with￿proceedings￿and￿claims,￿our￿management￿evaluates,￿based￿on￿the￿relevant￿facts￿and￿legal￿principles,
the￿likelihood￿of￿an￿unfavorable￿outcome￿and￿whether￿the￿amount￿of￿the￿loss￿can￿be￿reasonably￿estimated.￿In￿most
cases,￿management￿determined￿that￿either￿a￿loss￿was￿not￿probable￿or￿was￿not￿reasonably￿estimable.￿Significant
subjective￿judgments￿were￿required￿in￿these￿evaluations,￿including￿judgments￿regarding￿the￿validity￿of￿asserted￿claims
and￿the￿likely￿outcome￿of￿legal￿and￿administrative￿proceedings.￿The￿outcome￿of￿these￿proceedings,￿however,￿is￿subject
to￿a￿number￿of￿factors￿beyond￿our￿control,￿most￿notably￿the￿uncertainty￿associated￿with￿predicting￿decisions￿by￿courts
and￿administrative￿agencies.￿In￿addition,￿estimates￿of￿the￿potential￿costs￿associated￿with￿legal￿and￿administrative
proceedings￿frequently￿cannot￿be￿subjected￿to￿any￿sensitivity￿analysis,￿as￿damage￿estimates￿or￿settlement￿offers￿by
claimants￿may￿bear￿little￿or￿no￿relation￿to￿the￿eventual￿outcome.￿Finally,￿in￿any￿particular￿proceeding,￿we￿may￿agree￿to
settle￿or￿to￿terminate￿a￿claim￿or￿proceeding￿in￿which￿we￿believe￿that￿it￿would￿ultimately￿prevail￿where￿we￿believe￿that
doing￿so,￿when￿taken￿together￿with￿other￿relevant￿commercial￿considerations,￿is￿more￿cost-effective￿than￿engaging￿in￿an
expensive￿and￿protracted￿litigation,￿the￿outcome￿of￿which￿is￿uncertain.

We￿accrue￿for￿legal￿costs￿related￿to￿litigation￿in￿our￿Consolidated￿Statements￿of￿Operations￿at￿the￿time￿when￿the￿related
legal￿services￿are￿actually￿provided.

Net Income per Ordinary Share
Basic￿net￿income￿per￿ordinary￿share￿is￿calculated￿by￿dividing￿net￿income￿by￿the￿weighted￿average￿number￿of￿ordinary
shares￿outstanding￿for￿that￿period.￿The￿dilutive￿effect￿is￿calculated￿using￿the￿treasury￿stock￿method.￿Excluded￿from
the￿diluted￿weighted￿average￿number￿of￿shares￿outstanding￿calculation￿are￿cumulative￿preference￿shares￿contingently
issuable￿to￿the￿preference￿share￿foundation,￿since￿they￿represent￿a￿different￿class￿of￿stock￿than￿the￿ordinary￿shares.

ASML￿ANNUAL￿REPORT￿2014

F-15

The￿basic￿and￿diluted￿net￿income￿per￿ordinary￿share￿has￿been￿calculated￿as￿follows:

Year ended December 31
(in thousands, except per share data)
Net income

2014
EUR
1,196,640

2013
EUR
1,015,490

2012
EUR
1,146,316

Weighted average number of shares outstanding during the year

437,142

429,770

424,096

Basic net income per ordinary share

2.74

2.36

2.70

Weighted average number of shares outstanding:
Plus￿shares￿applicable￿to:
Options￿and￿conditional￿shares

437,142

429,770

424,096

2,551

3,676

2,890

Dilutive potential ordinary shares

2,551

3,676

2,890

Adjusted weighted average number of shares

439,693

433,446

426,986

Diluted net income per ordinary share1

2.72

2.34

2.68

1

The￿calculation￿of￿diluted￿net￿income￿per￿ordinary￿share￿assumes￿the￿exercise￿of￿options￿issued￿under￿our￿stock￿option￿plans￿and￿the￿issuance￿of
shares￿under￿our￿share￿plans￿for￿periods￿in￿which￿exercises￿or￿issuances￿would￿have￿a￿dilutive￿effect.￿The￿calculation￿of￿diluted￿net￿income￿per
ordinary￿share￿does￿not￿assume￿exercise￿of￿such￿options￿or￿issuance￿of￿shares￿when￿such￿exercises￿or￿issuance￿would￿be￿anti-dilutive.

Comprehensive Income
Comprehensive￿income￿consists￿of￿net￿income￿(loss)￿and￿OCI.

OCI￿refers￿to￿gains￿and￿losses￿that￿are￿not￿included￿in￿net￿income￿(loss),￿but￿recorded￿directly￿in￿shareholders’￿equity.
For￿the￿years￿ended￿December￿31,￿2014,￿2013￿and￿2012￿comprehensive￿income￿consists￿of￿net￿income,￿unrealized
gains￿and￿losses￿on￿financial￿instruments,￿being￿available-for-sale￿securities￿and￿derivative￿financial￿instruments
designated￿for￿hedge￿accounting,￿net￿of￿taxes,￿and￿unrealized￿gains￿and￿losses￿on￿foreign￿currency￿translation,￿net￿of
taxes.

New US GAAP Accounting Pronouncements
For￿the￿below￿mentioned￿ASUs,￿issued￿in￿2014,￿the￿impact￿on￿our￿Financial￿Statements￿needs￿to￿be￿assessed:

•

In￿March￿2014,￿FASB￿issued￿ASU￿No.￿2014-09￿"Revenue￿From￿Contracts￿With￿Customers".￿The￿FASB￿and￿the￿IASB
initiated￿a￿joint￿project￿to￿clarify￿the￿principles￿for￿recognizing￿revenue￿and￿to￿develop￿a￿common￿revenue￿standard￿for
US￿GAAP￿and￿IFRS￿that￿would:
• Remove￿inconsistencies￿and￿weaknesses￿in￿previous￿revenue￿requirements;
• Provide￿a￿more￿robust￿framework￿for￿addressing￿revenue￿issues;
•

Improve￿comparability￿of￿revenue￿recognition￿practices￿across￿entities,￿industries,￿jurisdictions￿and￿capital
markets;

• Provide￿more￿useful￿information￿to￿users￿of￿financial￿statements￿through￿improved￿disclosure￿requirements;￿and
• Simplify￿the￿preparation￿of￿financial￿statements￿by￿reducing￿the￿number￿of￿requirements￿to￿which￿an￿entity￿must

refer.

For￿public￿entities,￿the￿ASU￿is￿effective￿for￿annual￿reporting￿periods￿(including￿interim￿reporting￿periods￿within￿those
periods)￿beginning￿after￿December￿15,￿2016.￿Early￿application￿is￿not￿permitted.￿We￿are￿currently￿in￿the￿process￿of
determining￿the￿impact￿of￿implementing￿this￿Standard￿on￿our￿Consolidated￿Financial￿Statements.

2. Business Combinations
On￿May￿30,￿2013,￿we￿concluded￿the￿acquisition￿of￿Cymer￿and￿obtained￿control￿through￿acquiring￿100￿percent￿of
the￿issued￿share￿capital￿of￿Cymer,￿for￿a￿consideration￿of￿EUR￿3.1￿billion.￿There￿were￿no￿contingent￿consideration
arrangements.￿The￿total￿consideration￿was￿allocated￿to￿other￿intangible￿assets￿of￿EUR￿751.5￿million,￿other￿net￿assets￿of
EUR￿287.6￿million￿and￿goodwill￿of￿EUR￿2,058.3￿million.

ASML￿ANNUAL￿REPORT￿2014

F-16

Prior￿to￿the￿acquisition,￿supply￿and￿R&D￿arrangements￿existed￿between￿Cymer￿and￿ASML.￿These￿pre-existing
relationships￿were￿effectively￿settled￿as￿a￿result￿of￿the￿acquisition￿in￿2013.￿We￿determined￿that￿the￿R&D￿arrangement
as￿well￿as￿the￿supply￿arrangements￿(excluding￿EUV)￿were￿at￿current￿market￿terms￿and￿therefore￿no￿gain￿or￿loss￿was
recognized.￿We￿determined￿that￿the￿EUV￿supply￿arrangements￿were￿favorable￿to￿ASML￿and￿therefore￿a￿gain￿of￿EUR
178.4￿million￿was￿recognized￿in￿cost￿of￿sales￿within￿our￿2013￿Consolidated￿Statements￿of￿Operations.￿This￿gain￿was
recognized￿separately￿from￿the￿business￿combination￿as￿it￿is￿not￿part￿of￿the￿assets￿acquired￿or￿liabilities￿assumed.
The￿approach￿for￿quantifying￿the￿favorable￿component￿to￿ASML￿of￿the￿EUV￿supply￿arrangements￿is￿based￿on￿the
assessment￿of￿the￿prices￿for￿such￿light￿sources￿if￿the￿EUV￿supply￿arrangements￿would￿have￿been￿renegotiated￿in￿May
2013.

The￿majority￿of￿the￿goodwill￿arising￿on￿the￿acquisition￿of￿Cymer￿is￿attributable￿to￿the￿fact￿that￿we￿believe￿that
the￿acquisition￿will￿help￿us￿achieving￿our￿strategic￿objective￿of￿delivering￿an￿economically￿viable￿EUV￿scanner￿to
semiconductor￿manufacturers￿as￿soon￿as￿reasonably￿possible.￿We￿believe￿that￿combining￿Cymer’s￿expertise￿in￿EUV
light￿sources￿with￿our￿expertise￿in￿lithography￿systems￿design￿and￿integration￿will￿reduce￿the￿risks￿related￿to￿the
successful￿development￿of￿and￿accelerate￿the￿introduction￿of￿EUV￿technology.￿Without￿the￿acquisition,￿we￿do￿not
believe￿that￿Cymer￿would￿have￿had￿sufficient￿resources￿to￿complete￿the￿development￿of￿the￿EUV￿light￿source￿and￿as
a￿result,￿the￿only￿way￿to￿make￿the￿EUV￿light￿source￿development￿successful￿without￿additional￿delay￿was￿through￿the
acquisition￿of￿Cymer.￿We￿believe￿that￿the￿acquisition￿allows￿us￿to￿more￿effectively￿partition￿responsibilities￿between
Cymer,￿its￿suppliers￿and￿us￿with￿respect￿to￿EUV￿light￿source￿development,￿thereby￿reducing￿risk￿and￿increasing
development￿speed.￿Also,￿synergies￿are￿expected￿from￿the￿combination.￿None￿of￿the￿goodwill￿recognized￿is￿expected￿to
be￿deductible￿for￿income￿tax￿purposes.

In￿the￿period￿between￿the￿date￿of￿acquisition￿and￿December￿31,￿2013￿Cymer￿contributed￿EUR￿178.7￿million￿to￿net￿sales
and￿a￿loss￿of￿EUR￿138.5￿million￿to￿net￿income￿(including￿a￿charge￿of￿EUR￿85.5￿million￿related￿to￿the￿purchase￿price
allocation￿adjustments).

In￿2013,￿we￿incurred￿EUR￿7.8￿million￿transaction￿costs￿relating￿to￿the￿acquisition￿of￿Cymer.￿These￿costs￿are￿included￿in
SG&A.

3. Fair Value Measurements
Fair￿value￿is￿the￿price￿that￿would￿be￿received￿to￿sell￿an￿asset￿or￿paid￿to￿transfer￿a￿liability￿in￿an￿orderly￿transaction
between￿market￿participants￿at￿the￿measurement￿date.￿The￿fair￿value￿measurement￿hierarchy￿prioritizes￿the￿inputs￿to
valuation￿techniques￿used￿to￿measure￿fair￿value￿as￿follows:
• Level￿1:￿Valuations￿based￿on￿inputs￿such￿as￿quoted￿prices￿for￿identical￿assets￿or￿liabilities￿in￿active￿markets￿that￿the

entity￿has￿the￿ability￿to￿access.

• Level￿2:￿Valuations￿based￿on￿inputs￿other￿than￿level￿1￿inputs￿such￿as￿quoted￿prices￿for￿similar￿assets￿or￿liabilities,

quoted￿prices￿in￿markets￿that￿are￿not￿active,￿or￿other￿inputs￿that￿are￿observable￿or￿can￿be￿corroborated￿by￿observable
data￿for￿substantially￿the￿full￿term￿of￿the￿assets￿or￿liabilities.

• Level￿3:￿Valuations￿based￿on￿inputs￿that￿are￿supported￿by￿little￿or￿no￿market￿activity￿and￿that￿are￿significant￿to￿the￿fair

value￿of￿the￿assets￿or￿liabilities.

The￿fair￿value￿hierarchy￿gives￿the￿highest￿priority￿to￿quoted￿prices￿(unadjusted)￿in￿active￿markets￿for￿identical￿assets
or￿liabilities￿(Level￿1)￿and￿the￿lowest￿priority￿to￿unobservable￿inputs￿(Level￿3).￿A￿financial￿instrument’s￿fair￿value
classification￿is￿based￿on￿the￿lowest￿level￿of￿any￿input￿that￿is￿significant￿in￿the￿fair￿value￿measurement￿hierarchy.

Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis
Investments￿in￿money￿market￿funds￿(as￿part￿of￿our￿cash￿and￿cash￿equivalents)￿have￿fair￿value￿measurements￿which￿are
all￿based￿on￿quoted￿prices￿for￿identical￿assets￿or￿liabilities.

Our￿available-for-sale￿financial￿instruments￿consist￿of￿Dutch￿Treasury￿Certificates￿and￿deposits￿with￿the￿Dutch
government.￿Dutch￿Treasury￿Certificates￿are￿traded￿in￿an￿active￿market￿and￿the￿fair￿value￿is￿determined￿based￿on￿quoted
market￿prices￿for￿identical￿assets￿or￿liabilities.￿The￿fair￿value￿of￿deposits￿is￿determined￿with￿reference￿to￿quoted￿market
prices￿in￿an￿active￿market￿for￿similar￿assets￿or￿discounted￿cash￿flow￿analysis.

The￿principal￿market￿in￿which￿we￿execute￿our￿derivative￿contracts￿is￿the￿institutional￿market￿in￿an￿over-the-counter
environment￿with￿a￿high￿level￿of￿price￿transparency.￿The￿market￿participants￿usually￿are￿large￿commercial￿banks.￿The
valuation￿inputs￿for￿our￿derivative￿contracts￿are￿based￿on￿quoted￿prices￿and￿quoting￿pricing￿intervals￿from￿public￿data
sources;￿they￿do￿not￿involve￿management￿judgement.

ASML￿ANNUAL￿REPORT￿2014

F-17

The￿valuation￿technique￿used￿to￿determine￿the￿fair￿value￿of￿forward￿foreign￿exchange￿contracts￿(used￿for￿hedging
purposes)￿approximates￿the￿NPV￿technique￿which￿is￿the￿estimated￿amount￿that￿a￿bank￿would￿receive￿or￿pay￿to￿terminate
the￿forward￿foreign￿exchange￿contracts￿at￿the￿reporting￿date,￿taking￿into￿account￿current￿interest￿rates￿and￿current
exchange￿rates.

The￿valuation￿technique￿used￿to￿determine￿the￿fair￿value￿of￿interest￿rate￿swaps￿(used￿for￿hedging￿purposes)￿is￿the￿NPV
technique,￿which￿is￿the￿estimated￿amount￿that￿a￿bank￿would￿receive￿or￿pay￿to￿terminate￿the￿swap￿agreements￿at￿the
reporting￿date,￿taking￿into￿account￿current￿interest￿rates.

Our￿Eurobonds￿serve￿as￿hedged￿items￿in￿fair￿value￿hedge￿relationships￿in￿which￿we￿hedge￿the￿variability￿of￿changes￿in
the￿fair￿value￿of￿our￿Eurobonds￿due￿to￿changes￿in￿market￿interest￿rates￿with￿interest￿rate￿swaps.￿The￿fair￿value￿changes
of￿these￿interest￿rate￿swaps￿are￿recorded￿on￿the￿Consolidated￿Balance￿Sheets￿under￿derivative￿financial￿instruments
(within￿other￿current￿assets￿and￿other￿non-current￿assets)￿and￿the￿carrying￿amounts￿of￿the￿Eurobonds￿are￿adjusted￿for
the￿effective￿portion￿of￿these￿fair￿value￿changes￿only.￿For￿the￿actual￿aggregate￿carrying￿amount￿and￿the￿fair￿value￿of￿our
Eurobonds,￿see￿Note￿15.

The￿following￿table￿presents￿our￿financial￿assets￿and￿financial￿liabilities￿that￿are￿measured￿at￿fair￿value￿on￿a￿recurring
basis:

As of December 31, 2014
(in thousands)
Assets measured at fair value
Derivative￿financial￿instruments￿1
Money￿market￿funds￿2
Short-term￿investments￿3
Total

Level 1
EUR

-
426,742
334,864
761,606

Level 2
EUR

153,803
-
-
153,803

Liabilities measured at fair value
Derivative￿financial￿instruments￿1

-

67,755

Assets and Liabilities for which fair values are disclosed
Long-term￿debt￿4

1,139,628

-

Derivative￿financial￿instruments￿consist￿of￿forward￿foreign￿exchange￿contracts￿and￿interest￿rate￿swaps.￿See￿Note￿4.

1
2 Money￿market￿funds￿are￿part￿of￿our￿cash￿and￿cash￿equivalents.
Short-term￿investments￿consist￿of￿Dutch￿Treasury￿Certificates.
3
Long-term￿debt￿relates￿to￿Eurobonds,￿further￿details￿see￿Note￿15.
4

As of December 31, 2013
(in thousands)
Assets measured at fair value
Derivative￿financial￿instruments￿1
Money￿market￿funds￿2
Short-term￿investments￿3
Total

Level 1
EUR

-
535,000
304,884
839,884

Level 2
EUR

71,620
-
375,000
446,620

Liabilities measured at fair value
Derivative￿financial￿instruments￿1

-

11,652

Assets and Liabilities for which fair values are disclosed
Long-term￿debt￿4

1,028,238

-

Level 3
EUR

-
-
-
-

-

-

Total
EUR

153,803
426,742
334,864
915,409

67,755

1,139,628

Level 3
EUR

Total
EUR

-
-
-
-

-

-

71,620
535,000
679,884
1,286,504

11,652

1,028,238

Derivative￿financial￿instruments￿consist￿of￿forward￿foreign￿exchange￿contracts￿and￿interest￿rate￿swaps.￿See￿Note￿4.

1
2 Money￿market￿funds￿are￿part￿of￿our￿cash￿and￿cash￿equivalents.
3
4

Short-term￿investments￿consist￿of￿Dutch￿Treasury￿Certificates￿and￿deposits￿with￿the￿Dutch￿government.
Long-term￿debt￿relates￿to￿Eurobonds,￿further￿details￿see￿Note￿15.

There￿were￿no￿transfers￿between￿levels￿during￿the￿years￿ended￿December￿31,￿2014￿and￿December￿31,￿2013.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
In￿2014,￿we￿had￿no￿significant￿fair￿value￿measurements￿on￿a￿nonrecurring￿basis.￿We￿did￿not￿recognize￿any￿impairment
charges￿for￿goodwill￿and￿other￿intangible￿assets￿during￿2014.￿See￿Notes￿10￿and￿11￿for￿more￿information.

ASML￿ANNUAL￿REPORT￿2014

F-18

4. Financial Risk Management
We￿are￿exposed￿to￿certain￿financial￿risks￿such￿as￿market￿risk￿(including￿foreign￿currency￿risk￿and￿interest￿rate￿risk),
credit￿risk,￿liquidity￿risk￿and￿capital￿risk.￿The￿overall￿risk￿management￿program￿focuses￿on￿the￿unpredictability￿of
financial￿markets￿and￿seeks￿to￿minimize￿potentially￿adverse￿effects￿on￿our￿financial￿performance.￿We￿use￿derivative
financial￿instruments￿to￿hedge￿certain￿risk￿exposures.￿None￿of￿our￿transactions￿are￿entered￿into￿for￿trading￿or
speculative￿purposes.￿We￿believe￿that￿market￿information￿is￿the￿most￿reliable￿and￿transparent￿measure￿for￿our￿derivative
financial￿instruments￿that￿are￿measured￿at￿fair￿value.

Foreign Currency Risk Management
Our￿sales￿are￿predominately￿denominated￿in￿euros.￿Exceptions￿may￿occur￿on￿a￿customer￿by￿customer￿basis.￿Our￿cost
of￿sales￿and￿other￿costs￿are￿mainly￿denominated￿in￿euros,￿to￿a￿certain￿extent￿in￿U.S.￿dollars,￿Taiwanese￿dollars￿and
Japanese￿yen￿and￿to￿a￿limited￿extent￿in￿other￿currencies.￿Therefore,￿we￿are￿exposed￿to￿foreign￿currency￿exchange￿risk.

It￿is￿our￿policy￿to￿hedge￿material￿transaction￿exposures,￿such￿as￿forecasted￿sales￿and￿purchase￿transactions,￿and
material￿net￿remeasurement￿exposures,￿such￿as￿accounts￿receivable￿and￿payable.￿We￿hedge￿these￿exposures￿through
the￿use￿of￿foreign￿exchange￿contracts.￿In￿line￿with￿our￿overall￿risk￿management￿program￿we￿do￿not￿hedge￿currency
translation￿exposures￿resulting￿from￿net￿equity￿investments￿in￿foreign￿subsidiaries.

As￿of￿December￿31,￿2014,￿accumulated￿OCI￿includes￿EUR￿16.3￿million￿(2013:￿EUR￿10.7￿million)￿(net￿of￿taxes:￿EUR
14.5￿million;￿2013:￿EUR￿9.5￿million￿loss)￿representing￿the￿total￿anticipated￿gain￿to￿be￿released￿to￿cost￿of￿sales,￿which
will￿offset￿the￿EUR￿equivalent￿of￿foreign￿currency￿denominated￿forecasted￿purchase￿transactions.￿All￿amounts￿are
expected￿to￿be￿released￿over￿the￿next￿12￿months.￿As￿of￿December￿31,￿2014,￿no￿amount￿(2013:￿no￿amount)￿was￿included
in￿accumulated￿OCI￿representing￿the￿total￿anticipated￿gain￿to￿be￿released￿to￿sales,￿which￿will￿be￿offset￿by￿the￿EUR
equivalent￿of￿foreign￿currency￿denominated￿forecasted￿sales￿transactions.￿The￿effectiveness￿of￿all￿contracts￿for￿which
we￿apply￿hedge￿accounting￿is￿monitored￿on￿a￿quarterly￿basis￿throughout￿the￿life￿of￿the￿hedges.￿During￿2013￿and￿2014,
no￿ineffective￿hedge￿relationships￿were￿recognized.

Interest Rate Risk Management
We￿have￿interest-bearing￿assets￿and￿liabilities￿that￿expose￿us￿to￿fluctuations￿in￿market￿interest￿rates.￿We￿use￿interest
rate￿swaps￿to￿align￿the￿interest-typical￿terms￿of￿interest-bearing￿liabilities￿with￿the￿interest-typical￿terms￿of￿interest-
bearing￿assets.￿There￿may￿be￿residual￿interest￿rate￿risk￿to￿the￿extent￿the￿asset￿and￿liability￿positions￿do￿not￿fully￿offset.

As￿part￿of￿our￿hedging￿policy,￿we￿use￿interest￿rate￿swaps￿to￿hedge￿changes￿in￿fair￿value￿of￿our￿Eurobonds￿due￿to
changes￿in￿market￿interest￿rates,￿thereby￿offsetting￿the￿variability￿of￿future￿interest￿receipts￿on￿part￿of￿our￿cash￿and
cash￿equivalents.￿During￿2014,￿these￿hedges￿were￿highly￿effective￿in￿hedging￿the￿fair￿value￿exposure￿to￿interest￿rate
movements.￿The￿changes￿in￿fair￿value￿of￿the￿Eurobonds￿were￿included￿at￿the￿same￿time￿in￿the￿Consolidated￿Statements
of￿Operations￿as￿the￿changes￿in￿the￿fair￿value￿of￿the￿interest￿rate￿swaps.

Furthermore,￿as￿part￿of￿our￿hedging￿policy,￿we￿use￿interest￿rate￿swaps￿to￿hedge￿the￿variability￿of￿future￿interest￿cash
flows￿relating￿to￿certain￿of￿our￿operating￿lease￿obligations.￿During￿2014,￿these￿hedges￿were￿highly￿effective￿in￿hedging
the￿cash￿flow￿exposure￿to￿interest￿rate￿movements.

Financial Instruments
We￿use￿foreign￿exchange￿contracts￿to￿manage￿our￿foreign￿currency￿risk￿and￿interest￿rate￿swaps￿to￿manage￿our￿interest
rate￿risk.￿The￿following￿table￿summarizes￿the￿notional￿amounts￿and￿estimated￿fair￿values￿of￿our￿derivative￿financial
instruments:

(in thousands)
Forward￿foreign￿exchange￿contracts
Interest￿rate￿swaps

As of December 31 Notional amount
EUR
1,219,894
1,013,053

Fair Value Notional amount
EUR
986,986
1,013,053

EUR
(52,319)
138,367

Fair Value
EUR
8,583
51,385

2014

2013

ASML￿ANNUAL￿REPORT￿2014

F-19

The￿following￿table￿summarizes￿our￿derivative￿financial￿instruments￿per￿category:

As of December 31
(in thousands)
Interest￿rate￿swaps￿-￿cash￿flow￿hedges
Interest￿rate￿swaps￿-￿fair￿value￿hedges
Forward￿foreign￿exchange￿contracts￿-￿cash￿flow￿hedges
Forward￿foreign￿exchange￿contracts￿-￿other￿hedges￿(no￿hedge￿accounting)
Total

Less￿non-current￿portion:
Interest￿rate￿swaps￿-￿cash￿flow￿hedges
Interest￿rate￿swaps￿-￿fair￿value￿hedges
Total non-current portion

2014

2013

Assets
EUR
-
141,953
8,777
3,073
153,803

-
115,546
115,546

Liabilities
EUR
3,586
-
36
64,133
67,755

2,808
-
2,808

Assets
EUR
-
54,983
3
16,634
71,620

-
30,777
30,777

Liabilities
EUR
3,598
-
6,039
2,015
11,652

2,608
-
2,608

Total current portion

38,257

64,947

40,843

9,044

The￿fair￿value￿part￿of￿a￿hedging￿derivative￿financial￿instruments￿that￿has￿a￿remaining￿term￿of￿12￿months￿or￿less￿after
balance￿sheet￿date￿is￿classified￿as￿current￿asset￿or￿liability.￿When￿the￿fair￿value￿part￿of￿a￿hedging￿derivative￿has￿a￿term
of￿more￿than￿12￿months￿after￿balance￿sheet￿date,￿it￿is￿classified￿as￿non-current￿asset￿or￿liability.￿The￿current￿portion
of￿derivative￿financial￿instruments￿is￿included￿in,￿respectively,￿other￿current￿assets￿and￿current￿accrued￿and￿other
liabilities￿in￿the￿Consolidated￿Balance￿Sheets.￿The￿non-current￿portion￿of￿derivative￿financial￿instruments￿is￿included￿in,
respectively,￿other￿non-current￿assets￿and￿non-current￿accrued￿and￿other￿liabilities￿in￿the￿Consolidated￿Balance￿Sheets.

For￿further￿information￿regarding￿our￿derivative￿financial￿instruments,￿see￿Note￿3.

Foreign Exchange Contracts
The￿notional￿principal￿amounts￿of￿the￿outstanding￿forward￿foreign￿exchange￿contracts￿in￿the￿main￿currencies￿U.S.￿dollar,
Japanese￿yen￿and￿Taiwanese￿dollar￿at￿December￿31,￿2014￿are￿USD￿958.0￿million,￿JPY￿44.8￿billion￿and￿TWD￿6.2￿billion
(2013:￿USD￿1,144.0￿million,￿JPY￿2.2￿billion￿and￿TWD￿2.7￿billion).

The￿hedged￿highly￿probable￿forecasted￿transactions￿denominated￿in￿foreign￿currency￿are￿expected￿to￿occur￿at￿various
dates￿during￿the￿coming￿12￿months.￿Gains￿and￿losses￿recognized￿in￿OCI￿on￿forward￿foreign￿exchange￿contracts￿as￿of
December￿31,￿2014￿will￿be￿recognized￿in￿the￿Consolidated￿Statements￿of￿Operations￿in￿the￿period￿during￿which￿the
hedged￿forecasted￿transactions￿affect￿the￿Consolidated￿Statements￿of￿Operations.

In￿2014,￿we￿recognized￿a￿net￿amount￿of￿EUR￿6.7￿million￿loss￿(2013:￿EUR￿2.3￿million￿gain;￿2012:￿EUR￿8.7￿million￿gain)￿in
the￿Consolidated￿Statements￿of￿Operations￿resulting￿from￿effective￿cash￿flow￿hedges￿for￿forecasted￿sales￿and￿purchase
transactions￿that￿occurred￿in￿the￿year.￿Furthermore,￿we￿recognized￿a￿net￿amount￿of￿EUR￿119.3￿million￿loss￿in￿the
Consolidated￿Statements￿of￿Operations￿resulting￿from￿derivative￿financial￿instruments￿measured￿at￿fair￿value￿through
profit￿or￿loss￿(2013:￿EUR￿62.5￿million￿gain;￿2012:￿EUR￿3.0￿million￿gain).

Interest Rate Swaps
The￿notional￿principal￿amount￿of￿the￿outstanding￿interest￿rate￿swap￿contracts￿as￿of￿December￿31,￿2014￿was￿EUR￿1,013.1
million￿(2013:￿EUR￿1,013.1￿million).

Credit Risk Management
Financial￿instruments￿that￿potentially￿subject￿us￿to￿significant￿concentration￿of￿credit￿risk￿consist￿principally￿of￿cash
and￿cash￿equivalents,￿short-term￿investments,￿derivative￿financial￿instruments￿used￿for￿hedging￿activities,￿accounts
receivable￿and￿finance￿receivables.

Cash￿and￿cash￿equivalents,￿short-term￿investments￿and￿derivative￿financial￿instruments￿contain￿an￿element￿of￿risk￿of
the￿counterparties￿being￿unable￿to￿meet￿their￿obligations.￿Our￿risk￿management￿program￿focuses￿appropriately￿on￿the
current￿environment￿of￿uncertainty￿in￿the￿financial￿markets,￿especially￿in￿the￿euro-zone.￿We￿invest￿our￿cash￿and￿cash
equivalents￿and￿short-term￿investments￿in￿short-term￿deposits￿with￿financial￿institutions￿that￿have￿good￿credit￿ratings
and￿with￿the￿Dutch￿government,￿in￿Dutch￿Treasury￿Certificates￿and￿in￿AAAm-rated￿money￿market￿funds￿that￿invest
in￿high-rated￿short-term￿debt￿securities￿of￿financial￿institutions￿and￿governments.￿To￿mitigate￿the￿risk￿that￿any￿of￿our
counterparties￿in￿hedging￿transactions￿is￿unable￿to￿meet￿its￿obligations,￿we￿only￿enter￿into￿transactions￿with￿a￿limited
number￿of￿major￿financial￿institutions￿that￿have￿good￿credit￿ratings￿and￿closely￿monitor￿the￿creditworthiness￿of￿our
counterparties.￿Concentration￿risk￿is￿mitigated￿by￿limiting￿the￿exposure￿to￿a￿single￿counterparty.

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Our￿customers￿consist￿of￿IC￿manufacturers￿located￿throughout￿the￿world.￿We￿perform￿ongoing￿credit￿evaluations￿of
our￿customers’￿financial￿condition.￿We￿take￿additional￿measures￿to￿mitigate￿credit￿risk￿when￿considered￿appropriate￿by
means￿of￿e.g.￿down￿payments,￿letters￿of￿credit￿or￿retention￿of￿ownership￿provisions￿in￿contracts.￿Retention￿of￿ownership
enables￿us￿to￿recover￿the￿systems￿in￿the￿event￿a￿customer￿defaults￿on￿payment.

5. Cash and Cash Equivalents and Short-term Investments
Cash￿and￿cash￿equivalents￿at￿December￿31,￿2014￿include￿deposits￿with￿financial￿institutions￿that￿have￿good￿credit
ratings￿and￿with￿the￿Dutch￿government￿of￿EUR￿1,200.0￿million￿(2013:￿EUR￿853.5￿million),￿investments￿in￿AAAm-rated
money￿market￿funds￿that￿invest￿in￿debt￿securities￿of￿financial￿institutions￿that￿have￿good￿credit￿ratings￿and￿governments
of￿EUR￿426.7￿million￿(2013:￿EUR￿535.0￿million)￿and￿interest-bearing￿bank￿accounts￿of￿EUR￿792.8￿million￿(2013:￿EUR
942.2￿million).￿Our￿cash￿and￿cash￿equivalents￿are￿predominantly￿denominated￿in￿euros￿and￿partly￿in￿U.S.￿dollars.

Cash￿and￿cash￿equivalents￿have￿insignificant￿interest￿rate￿risk￿and￿remaining￿maturities￿of￿three￿months￿or￿less￿at￿the
date￿of￿acquisition.￿Except￿for￿an￿amount￿of￿EUR￿5.1￿million,￿no￿restrictions￿on￿usage￿of￿cash￿and￿cash￿equivalents
exist.￿The￿carrying￿amount￿of￿these￿assets￿approximates￿their￿fair￿value.

Short-term￿investments￿have￿insignificant￿interest￿rate￿risk￿and￿remaining￿maturities￿longer￿than￿three￿months￿but￿less
than￿one￿year￿at￿the￿date￿of￿acquisition.

Short-term￿investments￿(classified￿as￿available￿for￿sale￿securities)￿consist￿of￿the￿following:

As of December 31, 2014
(in thousands)
Dutch￿Treasury￿Certificates
Deposits
Total

As of December 31, 2013
(in thousands)
Dutch￿Treasury￿Certificates
Deposits
Total

Cost basis
334,864
-
334,864

Cost basis
304,884
375,000
679,884

Unrealized
Gains
-
-
-

Unrealized
Gains
-
-
-

Unrealized
Losses
-
-
-

Recorded Basis
334,864
-
334,864

Unrealized
Losses
-
-
-

Recorded Basis
304,884
375,000
679,884

6. Accounts Receivable
Accounts￿receivable￿consist￿of￿the￿following:

As of December 31
(in thousands)
Accounts￿receivable,￿gross
Allowance￿for￿doubtful￿receivables
Accounts receivable, net

2014
EUR
1,054,574
(2,070)
1,052,504

2013
EUR
880,169
(1,848)
878,321

The￿increase￿in￿accounts￿receivable￿as￿of￿December￿31,￿2014￿compared￿to￿December￿31,￿2013￿was￿mainly￿caused￿by￿a
change￿in￿products￿towards￿more￿high-end￿system￿types.

The￿carrying￿amount￿of￿the￿accounts￿receivable￿approximates￿the￿fair￿value.￿We￿perform￿ongoing￿credit￿evaluations
on￿our￿customers'￿financial￿condition.￿We￿periodically￿review￿whether￿an￿allowance￿for￿credit￿losses￿is￿needed￿by
considering￿factors￿such￿as￿historical￿payment￿experience,￿credit￿quality,￿aging￿of￿the￿accounts￿receivable￿balances,￿and
current￿economic￿conditions￿that￿may￿affect￿a￿customer's￿ability￿to￿pay.

ASML￿ANNUAL￿REPORT￿2014

F-21

Movements￿of￿the￿allowance￿for￿doubtful￿receivables￿are￿as￿follows:

Year ended December 31
(in thousands)
Balance￿at￿beginning￿of￿year
Addition￿for￿the￿year1
Effect￿of￿changes￿in￿exchange￿rates
Utilization￿of￿the￿provision
Balance at end of year

2014
EUR
(1,848)
(133)
(98)
9
(2,070)

2013
EUR
(2,071)
(1,062)
128
1,157
(1,848)

1

The￿addition￿for￿the￿year￿is￿recorded￿in￿the￿cost￿of￿sales.

7. Finance Receivables
Finance￿receivables￿consist￿of￿receivables￿in￿relation￿to￿sales-type￿leases.￿The￿following￿table￿lists￿the￿components￿of
the￿finance￿receivables￿as￿of￿December￿31,￿2014￿and￿2013:

As of December 31
(in thousands)
Finance￿receivables,￿gross
Unearned￿interest
Finance receivables, net
Current￿portion￿of￿finance￿receivables,￿gross
Current￿portion￿of￿unearned￿interest
Non-current portion of finance receivables, net

2014
EUR
256,703
(5,355)
251,348
198,803
(2,716)
55,261

2013
EUR
302,977
(6,488)
296,489
254,227
(3,755)
46,017

The￿decrease￿in￿finance￿receivables￿as￿of￿December￿31,￿2014￿compared￿to￿December￿31,￿2013￿was￿caused￿by￿a￿change
in￿products,￿lower￿number￿of￿high-end￿system￿types￿included￿at￿the￿end￿of￿2014￿compared￿to￿2013.￿At￿December￿31,
2014,￿finance￿receivables￿due￿for￿payment￿in￿each￿of￿the￿next￿five￿years￿and￿thereafter￿are￿as￿follows:

(in thousands)
2015
2016
2017
2018
2019
Thereafter
Finance receivables, gross

EUR
198,803
6,150
36,450
15,300
-
-
256,703

We￿perform￿ongoing￿credit￿evaluations￿on￿our￿customers'￿financial￿condition.￿We￿periodically￿review￿whether￿an
allowance￿for￿credit￿losses￿is￿needed￿by￿considering￿factors￿such￿as￿historical￿payment￿experience,￿credit￿quality,￿the
aging￿of￿the￿finance￿receivables￿balances,￿and￿current￿economic￿conditions￿that￿may￿affect￿a￿customer's￿ability￿to￿pay.
In￿2014,￿2013￿and￿2012￿we￿did￿not￿record￿any￿expected￿credit￿losses￿from￿finance￿receivables.￿As￿of￿December￿31,
2014,￿the￿finance￿receivables￿were￿neither￿past￿due￿nor￿impaired.

8. Inventories
Inventories￿consist￿of￿the￿following:

As of December 31
(in thousands)
Raw￿materials
Work-in-process
Finished￿products

Inventories, gross
Allowance￿for￿obsolescence￿and/or￿lower￿market￿value
Inventories, net

2014
EUR
456,685
1,477,041
927,493

2,861,219
(311,382)
2,549,837

2013
EUR
438,853
1,549,119
666,648

2,654,620
(261,598)
2,393,022

The￿increase￿in￿finished￿products￿in￿2014￿compared￿to￿2013￿is￿mainly￿caused￿by￿a￿change￿in￿products￿towards￿more
high-end￿system￿types￿(NXT:1965Ci￿and￿NXT:1970Ci)￿and￿the￿build￿up￿of￿spare￿parts￿to￿service￿our￿NXE:3100￿and
NXE:3300B￿systems.

ASML￿ANNUAL￿REPORT￿2014

F-22

A￿summary￿of￿activity￿in￿the￿allowance￿for￿obsolescence￿and/or￿lower￿market￿value￿is￿as￿follows:

Year ended December 31
(in thousands)
Balance￿at￿beginning￿of￿year
Addition￿for￿the￿year
Effect￿of￿changes￿in￿exchange￿rates
Utilization￿of￿the￿provision
Balance at end of year

2014
EUR
(261,598)
(162,821)
(8,848)
121,885
(311,382)

2013
EUR
(267,366)
(164,852)
2,532
168,088
(261,598)

In￿2014,￿the￿addition￿for￿the￿year￿is￿recorded￿in￿cost￿of￿sales￿EUR￿146.3￿million￿and￿in￿R&D￿costs￿EUR￿16.5￿million
(2013:￿cost￿of￿sales￿EUR￿155.4￿million￿and￿R&D￿costs￿EUR￿9.5￿million,￿2012:￿cost￿of￿sales￿EUR￿125.2￿million￿and￿R&D
costs￿EUR￿5.7￿million).￿The￿2014￿addition￿for￿the￿year￿mainly￿related￿to￿inventory￿items￿which￿ceased￿to￿be￿used￿due￿to
technological￿developments￿and￿design￿changes￿which￿resulted￿in￿obsolescence￿of￿certain￿parts.

Utilization￿of￿the￿provision￿mainly￿relates￿to￿the￿sale￿and￿scrapping￿of￿obsolete￿inventories.￿In￿2014,￿2013￿and￿2012,
ASML￿made￿insignificant￿profit￿on￿the￿sale￿of￿inventories￿that￿had￿been￿previously￿written￿down.

9. Other Assets
Other￿current￿assets￿consist￿of￿the￿following:

As of December 31
(in thousands)
Advance￿payments￿to￿Zeiss
Prepaid￿expenses
Operations￿to￿be￿invoiced
Derivative￿financial￿instruments
VAT
Other￿assets
Other current assets

2014
EUR
69,307
161,482
40,912
38,257
41,121
39,012
390,091

2013
EUR
99,415
100,077
8,114
40,843
67,381
20,591
336,421

Zeiss￿is￿our￿sole￿supplier￿of￿main￿optical￿systems￿(lenses,￿mirrors,￿collectors￿and￿other￿critical￿optical￿components)￿and,
from￿time￿to￿time,￿receives￿non-interest￿bearing￿advance￿payments￿from￿us￿that￿support￿Zeiss'￿work-in-process,￿thereby
securing￿lens￿and￿optical￿module￿deliveries￿to￿us.￿Amounts￿owed￿under￿these￿advance￿payments￿are￿settled￿through
future￿lens￿or￿EUV￿optical￿module￿deliveries￿which￿explains￿the￿decrease￿in￿2014￿compared￿to￿2013.

Prepaid￿expenses￿mainly￿include￿prepaid￿income￿taxes￿on￿intercompany￿profit,￿not￿realized￿by￿the￿ASML￿group￿of￿EUR
58.2￿million￿as￿of￿December￿31,￿2014￿(2013:￿EUR￿45.4￿million).￿The￿increase￿in￿2014￿mainly￿relates￿to￿prepayments￿in
relation￿to￿our￿joint￿development￿projects￿with￿one￿of￿our￿research￿partners.

Derivative￿financial￿instruments￿consist￿of￿forward￿foreign￿exchange￿contracts￿and￿the￿current￿part￿of￿the￿aggregate￿fair
value￿of￿interest￿rate￿swaps,￿see￿Note￿4.

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Other￿non-current￿assets￿consist￿of￿the￿following:

As of December 31
(in thousands)
Advance￿payments￿to￿Zeiss
Derivative￿financial￿instruments
Compensation￿plan￿assets1
Prepaid￿expenses
Subordinated￿loan￿granted￿to￿lessor￿in￿respect￿of￿Veldhoven￿headquarters2
Other
Other non-current assets

2014
EUR
285,659
115,546
26,172
6,525
5,445
5,473
444,820

2013
EUR
224,123
30,777
20,174
10,950
5,445
7,090
298,559

1
2

For￿further￿details￿on￿compensation￿plan￿assets￿see￿Note￿18.
For￿further￿details￿on￿the￿loan￿granted￿to￿lessor￿in￿respect￿of￿Veldhoven￿headquarters￿see￿Note￿12.

The￿increase￿in￿the￿advance￿payments￿to￿Zeiss￿in￿2014￿compared￿to￿2013￿is￿mainly￿driven￿by￿a￿prepayment￿under￿an
EUV￿agreement.

Derivative￿financial￿instruments￿consist￿of￿the￿non-current￿part￿of￿the￿fair￿value￿of￿interest￿rate￿swaps,￿which￿increased￿in
value￿as￿a￿result￿of￿the￿decrease￿in￿EURIBOR,￿see￿Note￿4.

10. Goodwill
Changes￿in￿goodwill￿are￿summarized￿as￿follows:

Year ended December 31
(in thousands)
Cost
Balance￿at￿beginning￿of￿year
Acquisition￿through￿business￿combinations
Effect￿of￿changes￿in￿exchange￿rates
Balance at end of year

2014
EUR

2,088,589
-
268,947
2,357,536

2013
EUR

149,168
2,058,285
(118,864)
2,088,589

Goodwill￿is￿tested￿for￿impairment￿annually￿at￿the￿start￿of￿the￿fourth￿quarter￿and￿whenever￿events￿or￿changes￿in
circumstances￿indicate￿that￿the￿carrying￿amount￿of￿the￿goodwill￿may￿not￿be￿recoverable.

Goodwill￿mainly￿relates￿to￿the￿acquisition￿of￿Cymer.￿Within￿ASML￿we￿have￿identified￿two￿RUs,￿which￿are￿RU￿ASML￿and
RU￿CLS.

As￿of￿December￿31,￿2014￿the￿goodwill￿allocated￿to￿RU￿ASML￿amounts￿to￿EUR￿1,908.3￿million￿(2013:￿EUR￿1,690.7
million)￿and￿for￿RU￿CLS￿this￿amounts￿to￿EUR￿449.2￿million￿(2013:￿EUR￿397.9￿million).

For￿2014￿and￿2013,￿the￿fair￿value￿calculations￿of￿the￿RUs￿were￿performed￿by￿discounting￿the￿future￿cash￿flows
generated￿from￿the￿continuing￿use￿of￿the￿RUs.￿Cash￿flows￿beyond￿the￿forecasted￿period￿of￿five￿years￿have￿been
extrapolated￿using￿a￿0￿percent￿growth￿rate.

The￿pre-tax￿WACC￿used￿to￿determine￿the￿expected￿discounted￿future￿cash￿flows￿is￿10.5￿percent￿for￿RU￿ASML￿and￿11.8
percent￿for￿RU￿CLS.

Based￿on￿the￿recoverability￿testing￿during￿the￿annual￿goodwill￿impairment￿test,￿we￿believe￿that￿the￿fair￿values￿of￿the￿RUs
substantially￿exceed￿their￿carrying￿amounts,￿and￿therefore￿goodwill￿was￿not￿impaired￿as￿of￿December￿31,￿2014.

ASML￿ANNUAL￿REPORT￿2014

F-24

11. Other Intangible Assets
Other￿intangible￿assets￿consist￿of￿both￿finite-lived￿other￿intangible￿assets￿and￿indefinite-lived￿other￿intangible￿assets.
Brands,￿developed￿technology,￿customer￿relationships,￿in-process￿R&D￿and￿other￿were￿obtained￿from￿the￿acquisitions￿of
Cymer￿(2013)￿and￿Brion￿(2007).

Finite-lived￿other￿intangible￿assets￿consist￿of￿the￿following:

(in thousands)
Cost
Balance,￿January￿1,￿2013
Acquisitions￿through￿business￿combinations
Additions
Effect￿of￿changes￿in￿exchange￿rates

Balance,￿December￿31,￿2013
Additions
Effect￿of￿changes￿in￿exchange￿rates
Balance, December 31, 2014

Accumulated amortization
Balance,￿January￿1,￿2013
Amortization
Effect￿of￿changes￿in￿exchange￿rates

Balance,￿December￿31,￿2013
Amortization
Effect￿of￿changes￿in￿exchange￿rates
Balance, December 31, 2014

Brands
EUR

-
13,280
-
(726)

12,554
-
1,621
14,175

-
382
(13)

369
649
107
1,125

Carrying amount
December￿31,￿2013
December 31, 2014

12,185
13,050

Intellectual
property
EUR

Developed
technology
EUR

Customer
relationships
EUR

54,908
-
4,000
-

58,908
2,952
-
61,860

48,028
2,135
-

50,163
2,649
-
52,812

8,745
9,048

49,031
427,797
-
(23,380)

453,448
-
52,228
505,676

48,351
18,694
(596)

66,449
30,593
5,039
102,081

386,999
403,595

Other
EUR

2,231
-
-
-

2,231
-
-
2,231

2,212
19
-

2,231
-
-
2,231

Total
EUR

114,903
604,057
4,000
(33,013)

689,947
2,952
73,746
766,645

104,960
27,562
(783)

131,739
43,881
6,612
182,232

8,733
162,980
-
(8,907)

162,806
-
19,897
182,703

6,369
6,332
(174)

12,527
9,990
1,466
23,983

150,279
158,720

-
-

558,208
584,413

Intellectual￿property￿relates￿to￿licenses￿and￿patents￿purchased￿from￿third￿parties.￿During￿2014,￿we￿acquired￿intellectual
property￿from￿third￿parties￿for￿an￿amount￿of￿EUR￿3.0￿million￿(2013:￿EUR￿4.0￿million).

During￿2014,￿we￿recorded￿amortization￿charges￿of￿EUR￿43.9￿million￿(2013:￿EUR￿27.6￿million;￿2012:￿EUR￿6.1￿million)
which￿were￿recorded￿in￿cost￿of￿sales￿for￿EUR￿41.9￿million￿(2013:￿EUR￿27.0￿million;￿2012:￿EUR￿6.0￿million)￿and￿in￿R&D
costs￿for￿EUR￿2.0￿million￿(2013:￿EUR￿0.6￿million￿and￿2012:￿EUR￿0.1￿million).

Indefinite-lived￿other￿intangible￿assets￿consist￿of￿the￿following:

(in thousands)
Cost
Balance,￿January￿1,￿2013
Acquisitions￿through￿business￿combinations
Additions
Effect￿of￿changes￿in￿exchange￿rates

Balance,￿December￿31,￿2013
Additions
Carrying amount, December 31, 2014

In-process
R&D
EUR

-
147,485
-
(8,059)

139,426
-
139,426

As￿of￿December￿31,￿2014,￿the￿indefinite-lived￿other￿intangible￿assets￿amount￿to￿EUR￿139.4￿million￿(2013:￿EUR￿139.4
million)￿and￿are￿allocated￿to￿RU￿ASML.

ASML￿ANNUAL￿REPORT￿2014

F-25

During￿2014,￿2013￿and￿2012,￿we￿did￿not￿record￿any￿impairment￿charges￿for￿other￿intangible￿assets.

As￿at￿December￿31,￿2014,￿the￿estimated￿amortization￿expenses￿for￿other￿intangible￿assets,￿for￿the￿next￿five￿years￿and
thereafter,￿are￿as￿follows:

(in thousands)
2015
2016
2017
2018
2019
Thereafter
Amortization expenses

EUR
46,918
58,355
57,558
56,220
55,706
449,082
723,839

12. Property, Plant and Equipment
Property,￿plant￿and￿equipment￿consist￿of￿the￿following:

Land,
buildings and
constructions
EUR

Machinery
and
equipment
EUR

Leasehold
improvements
EUR

Furniture,
fixtures and
other
equipment
EUR

(in thousands)
Cost
Balance,￿January￿1,￿2013
Acquisitions￿through￿business￿combinations
Additions
Disposals
Effect￿of￿changes￿in￿exchange￿rates
Balance,￿December￿31,￿2013
Additions
Disposals
Effect￿of￿changes￿in￿exchange￿rates
Balance, December 31, 2014

Accumulated depreciation and impairment
Balance,￿January￿1,￿2013
Depreciation
Impairment￿charges
Disposals
Effect￿of￿changes￿in￿exchange￿rates
Balance,￿December￿31,￿2013
Depreciation
Impairment￿charges
Disposals
Effect￿of￿changes￿in￿exchange￿rates
Balance, December 31, 2014

Carrying amount
December￿31,￿2013
December 31, 2014

847,033
71,040
123,646
(14)
(6,605)
1,035,100
222,670
(1,557)
13,275
1,269,488

187,272
47,791
3,619
(5)
(1,116)
237,561
52,242
7,403
(90)
(1,017)
296,099

797,539
973,389

690,759
48,965
171,895
(90,244)
(17,490)
803,885
191,705
(222,836)
26,955
799,709

417,982
114,677
7,997
(42,625)
(8,068)
489,963
112,090
2,983
(190,154)
11,950
426,832

313,922
372,877

214,852
1,057
11,543
(336)
(1,464)
225,652
6,137
(1,208)
1,229
231,810

158,778
12,415
1,352
(266)
(422)
171,857
20,936
-
(1,204)
654
192,243

53,795
39,567

Total
EUR

2,089,419
124,308
339,252
(92,519)
(27,342)
2,433,118
452,262
(326,086)
44,803
2,604,097

1,059,496
197,053
13,057
(44,178)
(10,150)
1,215,278
209,504
10,528
(291,898)
13,162
1,156,574

336,775
3,246
32,168
(1,925)
(1,783)
368,481
31,750
(100,485)
3,344
303,090

295,464
22,170
89
(1,282)
(544)
315,897
24,236
142
(100,450)
1,575
241,400

52,584
61,690

1,217,840
1,447,523

As￿of￿December￿31,￿2014,￿the￿carrying￿amount￿includes￿assets￿under￿construction￿for￿land,￿buildings￿and￿constructions
of￿EUR￿201.1￿million￿(2013:￿EUR￿49.3￿million),￿machinery￿and￿equipment￿of￿EUR￿30.2￿million￿(2013:￿EUR￿35.9￿million),
leasehold￿improvements￿of￿EUR￿2.8￿million￿(2013:￿EUR￿1.0￿million)￿and￿furniture,￿fixtures￿and￿other￿equipment￿of￿EUR
11.2￿million￿(2013:￿EUR￿13.9￿million).￿As￿of￿December￿31,￿2014,￿the￿carrying￿amount￿of￿land￿amounts￿to￿EUR￿82.9￿million
(2013:￿EUR￿79.2￿million).

The￿majority￿of￿the￿additions￿in￿2014￿in￿property,￿plant￿and￿equipment￿relate￿to￿the￿further￿expansion￿of￿EUV￿production
facilities￿for￿our￿newest￿technology.

ASML￿ANNUAL￿REPORT￿2014

F-26

The￿majority￿of￿additions￿in￿2014￿in￿machinery￿and￿equipment￿mainly￿relates￿to￿operating￿leases￿to￿customers,
prototypes,￿evaluation￿and￿training￿systems￿which￿are￿similar￿to￿those￿that￿ASML￿sells￿in￿its￿ordinary￿course￿of￿business.
These￿systems￿are￿capitalized￿under￿property,￿plant￿and￿equipment￿because￿they￿are￿held￿for￿own￿use,￿for￿operating
lease￿and￿for￿evaluation￿purposes.￿These￿are￿recorded￿at￿cost￿and￿depreciated￿over￿their￿expected￿useful￿life￿taking
into￿consideration￿their￿residual￿value.￿From￿the￿time￿that￿these￿assets￿are￿no￿longer￿held￿for￿use￿but￿intended￿for￿sale
in￿the￿ordinary￿course￿of￿business,￿they￿are￿reclassified￿from￿property,￿plant￿and￿equipment￿to￿inventory￿at￿the￿lower
of￿their￿carrying￿value￿or￿fair￿market￿value.￿Since￿the￿transfers￿between￿inventory￿and￿property,￿plant￿and￿equipment
are￿non-cash￿events,￿these￿are￿not￿reflected￿in￿the￿Consolidated￿Statements￿of￿Cash￿Flows.￿An￿amount￿of￿EUR￿95.5
million￿(2013:￿EUR￿115.9￿million)￿of￿the￿additions￿relates￿to￿non-cash￿transfers￿from￿inventory￿and￿an￿amount￿of￿EUR
1.5￿million￿(2013:￿EUR￿12.5￿million￿decrease)￿relates￿to￿other￿non-cash￿movements￿(mainly￿capital￿expenditures￿not￿yet
paid￿as￿at￿December￿31,￿2014).￿An￿amount￿of￿EUR￿30.7￿million￿(2013:￿EUR￿48.2￿million)￿of￿the￿disposals￿relates￿to￿non-
cash￿transfers￿to￿inventory.￿When￿sold,￿the￿proceeds￿and￿cost￿of￿these￿systems￿are￿recorded￿as￿net￿sales￿and￿cost￿of
sales,￿respectively,￿identical￿to￿the￿treatment￿of￿other￿sales￿transactions.￿The￿cost￿of￿sales￿for￿these￿systems￿includes
the￿inventory￿value￿and￿the￿additional￿costs￿of￿refurbishing￿(materials￿and￿labor).

As￿of￿December￿31,￿2014,￿the￿carrying￿amount￿of￿machinery￿and￿equipment￿includes￿an￿amount￿of￿EUR￿68.6￿million￿with
respect￿to￿evaluation￿and￿operating￿lease￿systems￿(2013:￿EUR￿36.7￿million).

The￿majority￿of￿the￿disposals￿during￿2014￿relate￿to￿fully￿depreciated￿long-lived￿assets,￿in￿general￿tooling￿and￿other
fixtures,￿which￿have￿been￿retired￿from￿active￿use.

During￿2014,￿we￿recorded￿depreciation￿charges￿of￿EUR￿209.5￿million￿(2013:￿EUR￿197.1￿million;￿2012:￿EUR￿179.3￿million)
of￿which￿we￿recorded￿EUR￿153.9￿million￿(2013:￿EUR￿144.1￿million;￿2012:￿EUR￿147.7￿million)￿in￿cost￿of￿sales,￿EUR￿36.3
million￿(2013￿EUR￿35.0￿million;￿2012:￿EUR￿15.3￿million)￿in￿R&D￿costs￿and￿EUR￿19.3￿million￿(2013:￿EUR￿18.0￿million;￿2012:
EUR￿16.3￿million)￿in￿SG&A￿costs.

Variable Interest Entity
The￿carrying￿amount￿of￿land,￿buildings￿and￿constructions￿includes￿an￿amount￿of￿EUR￿29.5￿million￿(2013:￿EUR￿30.9
million)￿relating￿to￿our￿headquarters￿in￿Veldhoven,￿the￿Netherlands,￿which￿is￿owned￿by￿Koppelenweg￿II￿B.V.,￿a￿"VIE".

As￿of￿2003,￿we￿are￿leasing￿the￿Veldhoven￿headquarters￿for￿a￿period￿of￿15￿years￿(starting￿in￿2003)￿from￿an￿entity￿("lessor")
that￿was￿incorporated￿by￿the￿VIE￿Shareholders.￿The￿lessor’s￿shareholders'￿equity￿amounts￿to￿EUR￿1.9￿million￿and￿has
not￿changed￿since￿2003.

The￿VIE￿shareholders￿each￿granted￿a￿loan￿of￿EUR￿11.6￿million￿and￿a￿fourth￿bank￿granted￿a￿loan￿of￿EUR￿12.3￿million
(EUR￿47.1￿million￿in￿total)￿to￿the￿parent￿of￿the￿lessor.￿ASML￿provided￿the￿parent￿of￿the￿lessor￿with￿a￿subordinated￿loan
of￿EUR￿5.4￿million￿and￿has￿a￿purchase￿option￿that￿is￿exercisable￿either￿at￿the￿end￿of￿the￿lease￿in￿2018,￿at￿a￿price￿of
EUR￿24.5￿million,￿or￿during￿the￿lease￿at￿a￿price￿equal￿to￿the￿book￿value￿of￿the￿assets.￿The￿total￿assets￿of￿the￿lessor
entity￿amounted￿to￿EUR￿54.5￿million￿at￿inception￿of￿the￿lease.￿The￿entity￿is￿determined￿to￿be￿a￿VIE￿because￿the￿equity
investors￿do￿not￿have￿sufficient￿equity￿at￿risk￿for￿the￿legal￿entity￿to￿finance￿its￿activities￿without￿sufficient￿additional
subordinated￿support.

The￿primary￿purpose￿for￿which￿the￿VIE￿was￿created￿was￿to￿provide￿ASML￿with￿use￿of￿the￿building￿for￿15￿years,￿where
ASML￿does￿not￿retain￿substantially￿all￿the￿risks￿and￿rewards￿from￿changes￿in￿value￿of￿the￿building.￿The￿main￿activities
of￿the￿entity￿are￿to￿rent,￿re-market￿and￿ultimately￿sell￿the￿building￿that￿is￿owned￿by￿the￿VIE.￿The￿economic￿performance
of￿the￿VIE￿is￿most￿significantly￿impacted￿by￿the￿ability￿of￿the￿lessee￿(ASML)￿to￿exercise￿the￿purchase￿option￿at￿any￿time
during￿the￿lease￿term,￿and￿thus￿we￿could￿potentially￿benefit￿from￿increases￿in￿the￿fair￿value￿of￿the￿building.

While￿the￿debt￿holders￿have￿an￿interest,￿and￿may￿absorb￿losses,￿and￿the￿equity￿holders￿have￿an￿interest￿and￿may￿receive
benefits,￿they￿do￿not￿have￿the￿power￿to￿direct￿activities￿that￿most￿significantly￿impact￿the￿entity’s￿economic￿performance
and￿therefore,￿cannot￿be￿the￿primary￿beneficiary.￿Through￿the￿pre-determined￿price￿of￿the￿call￿option￿ASML￿has￿the
power￿over￿the￿VIE,￿therefore￿only￿ASML￿meets￿both￿the￿power￿and￿losses/benefit￿criterion￿and￿consolidates￿the￿VIE.

ASML￿ANNUAL￿REPORT￿2014

F-27

13. Accrued and Other Liabilities
Accrued￿and￿other￿liabilities￿consist￿of￿the￿following:

As of December 31
(in thousands)
Deferred￿revenue
Costs￿to￿be￿paid
Down￿payments￿from￿customers
Personnel￿related￿items
Derivative￿financial￿instruments
Standard￿warranty￿reserve
Other
Accrued and other liabilities
Less:￿non-current￿portion￿of￿accrued￿and￿other￿liabilities1
Current portion of accrued and other liabilities

2014
EUR
1,268,633
411,725
647,317
301,075
67,755
41,508
21,441
2,759,454
411,655
2,347,799

2013
EUR
939,358
440,010
821,959
247,246
11,652
27,475
12,324
2,500,024
283,142
2,216,882

1

The￿main￿part￿of￿the￿non-current￿portion￿of￿accrued￿and￿other￿liabilities￿relates￿to￿down￿payments￿received￿from￿customers￿regarding￿future
shipments￿of￿EUV￿systems￿and￿deferrals￿with￿respect￿to￿services.

The￿increase￿in￿accrued￿and￿other￿liabilities￿mainly￿relates￿to￿the￿increases￿in￿deferred￿revenue,￿derivative￿financial
instruments￿and￿personnel￿related￿items,￿which￿are￿partly￿offset￿by￿a￿decrease￿in￿down￿payments￿from￿our￿customers
and￿costs￿to￿be￿paid.

Deferred￿revenue￿as￿of￿December￿31,￿2014￿mainly￿consists￿of￿credits￿regarding￿free￿or￿discounted￿products￿or￿services
as￿part￿of￿volume￿purchase￿agreements￿amounting￿to￿EUR￿925.2￿million￿(2013:￿EUR￿660.1￿million)￿and￿extended￿and
enhanced￿(optic)￿warranty￿contracts￿amounting￿to￿EUR￿313.8￿million￿(2013:￿EUR￿261.2￿million).￿Both￿include￿deferrals
with￿respect￿to￿our￿third-generation￿EUV￿systems,￿NXE:3300B.￿The￿total￿deferred￿revenue￿of￿the￿third-generation￿EUV
systems,￿NXE:3300B,￿is￿EUR￿102.5￿million￿(2013:￿EUR￿87.6￿million).

We￿receive￿down￿payments￿from￿our￿customers￿prior￿to￿shipment￿of￿systems￿included￿in￿our￿current￿product￿portfolio
or￿systems￿currently￿under￿development.￿The￿decrease￿in￿down￿payments￿from￿our￿customers￿is￿mainly￿due￿to￿the
shipment￿of￿NXE:3300B￿systems.

Costs￿to￿be￿paid￿as￿of￿December￿31,￿2014￿include￿an￿amount￿of￿EUR￿124.0￿million￿(2013:￿EUR￿171.2￿million)￿relating￿to
the￿expected￿losses￿to￿upgrade￿the￿first￿11￿NXE:3300B￿sources￿in￿the￿field,￿which￿was￿assumed￿by￿ASML￿as￿a￿result￿of
the￿acquisition￿of￿Cymer.￿In￿addition,￿costs￿to￿be￿paid￿include￿accrued￿costs￿for￿unbilled￿services￿provided￿by￿suppliers
including￿contracted￿labor,￿outsourced￿services￿and￿consultancy.

Personnel￿related￿items￿mainly￿consist￿of￿accrued￿management￿bonuses,￿accrued￿profit￿sharing,￿accrued￿vacation￿days,
accrued￿vacation￿allowance,￿accrued￿wage￿tax,￿social￿securities￿and￿accrued￿pension￿premiums.

Derivative￿financial￿instruments￿consist￿of￿the￿fair￿value￿of￿foreign￿currency￿contracts￿and￿the￿aggregate￿fair￿value￿of
interest￿rate￿swaps￿which￿includes￿accrued￿interest,￿see￿Note￿4.

Changes￿in￿standard￿warranty￿reserve￿for￿the￿years￿2014￿and￿2013￿are￿as￿follows:

Year ended December 31
(in thousands)
Balance￿at￿beginning￿of￿year
Acquisitions￿through￿business￿combinations
Additions￿for￿the￿year
Utilization￿of￿the￿reserve
Release￿of￿the￿reserve
Effect￿of￿exchange￿rates
Balance at end of year

2014
EUR
27,475
-
42,420
(22,749)
(5,468)
(170)
41,508

2013
EUR
21,626
2,978
37,124
(19,924)
(13,076)
(1,253)
27,475

The￿increase￿of￿the￿total￿standard￿warranty￿reserve￿is￿mainly￿related￿to￿accrued￿warranties￿for￿NXE:3300B￿systems.￿This
increase￿is￿included￿in￿cost￿of￿sales.

ASML￿ANNUAL￿REPORT￿2014

F-28

14. Provisions
The￿movement￿in￿the￿provision￿for￿lease￿contract￿termination￿costs￿is￿as￿follows:

(in thousands)
Balance,￿January￿1
Utilization￿of￿the￿provision
Release￿of￿the￿provision
Unwinding￿of￿discount
Effect￿of￿exchange￿rates
Provision for lease contract termination costs
Less:￿current￿portion￿of￿provision￿for￿lease￿contract￿termination￿costs
Non-current portion of provision for lease contract termination costs

2014
EUR
6,847
(2,517)
-
918
744
5,992
2,354
3,638

2013
EUR
10,254
(2,790)
(1,011)
391
3
6,847
2,227
4,620

The￿provision￿for￿lease￿contract￿termination￿costs￿relates￿to￿an￿operating￿lease￿contract￿for￿a￿building￿for￿which￿no
economic￿benefits￿are￿expected.￿The￿provision￿for￿lease￿contract￿termination￿costs￿is￿expected￿to￿be￿fully￿utilized￿by
2017.

15. Long-term Debt
Long-term￿debt￿consists￿of￿the￿following:

As of December 31
(in thousands)
EUR￿600￿million￿5.75￿percent￿senior￿notes￿due￿2017,￿carrying￿amount
EUR￿750￿million￿3.375￿percent￿senior￿notes￿due￿2023,￿carrying￿amount
Loan￿headquarter￿building1
Other
Long-term debt
Less:￿current￿portion￿of￿long-term￿debt
Non-current portion of long-term debt

2014
EUR
264,085
841,514
29,507
19,031
1,154,137
4,261
1,149,876

2013
EUR
270,339
751,591
30,936
21,704
1,074,570
4,385
1,070,185

1

This￿loan￿relates￿to￿our￿VIE,￿see￿Note￿12.

Our￿obligations￿to￿make￿principal￿repayments￿under￿our￿Eurobonds￿and￿other￿borrowing￿arrangements￿excluding
interest￿expense￿as￿of￿December￿31,￿2014,￿for￿the￿next￿five￿years￿and￿thereafter,￿are￿as￿follows:

(in thousands)
2015
2016
2017
2018
2019
Thereafter
Long-term debt
Less:￿current￿portion￿of￿long-term￿debt
Non-current portion of long-term debt

EUR
4,261
4,606
242,361
27,997
1,762
755,705
1,036,692
4,261
1,032,431

Eurobonds
The￿following￿table￿summarizes￿the￿carrying￿amount￿of￿our￿outstanding￿Eurobonds,￿including￿the￿fair￿value￿of￿interest
rate￿swaps￿used￿to￿hedge￿the￿change￿in￿the￿fair￿value￿of￿the￿Eurobonds:

As of December 31
(in thousands)
Amortized￿cost￿amount
Fair￿value￿interest￿rate￿swaps1
Carrying amount

2014
EUR
978,242
127,357
1,105,599

2013
EUR
981,291
40,639
1,021,930

1

The￿fair￿value￿of￿the￿interest￿rate￿swaps￿excludes￿accrued￿interest.

ASML￿ANNUAL￿REPORT￿2014

F-29

In￿June￿2007,￿we￿completed￿an￿offering￿of￿our￿EUR￿600￿million￿5.75￿percent￿senior￿notes￿due￿2017,￿with￿interest￿payable
annually￿on￿June￿13.￿The￿notes￿are￿redeemable￿at￿the￿option￿of￿ASML,￿in￿whole￿or￿in￿part,￿at￿any￿time￿by￿paying￿a￿make
whole￿premium,￿and￿unless￿previously￿redeemed,￿will￿be￿redeemed￿at￿100￿percent￿of￿their￿principal￿amount￿on￿June￿13,
2017.￿In￿September￿2013,￿we￿repurchased￿a￿nominal￿amount￿of￿EUR￿361.8￿million￿of￿these￿notes￿in￿a￿tender￿offer￿for￿a
cash￿amount￿of￿EUR￿423.0￿million￿including￿accrued￿interest.

In￿September￿2013,￿we￿completed￿an￿offering￿of￿our￿EUR￿750￿million￿3.375￿percent￿senior￿notes￿due￿2023,￿with￿interest
payable￿annually￿on￿September￿19.￿The￿notes￿are￿redeemable￿at￿the￿option￿of￿ASML,￿in￿whole￿or￿in￿part,￿at￿any￿time
by￿paying￿a￿make￿whole￿premium,￿and￿unless￿previously￿redeemed,￿will￿be￿redeemed￿at￿100￿percent￿of￿their￿principal
amount￿on￿September￿19,￿2023.

The￿Eurobonds￿serve￿as￿hedged￿items￿in￿fair￿value￿hedge￿relationships￿in￿which￿we￿hedge￿the￿variability￿of￿changes￿in
the￿fair￿value￿of￿our￿Eurobonds￿due￿to￿changes￿in￿market￿interest￿rates￿with￿interest￿rate￿swaps.￿The￿fair￿value￿changes
of￿these￿interest￿rate￿swaps￿are￿recorded￿on￿the￿Consolidated￿Balance￿Sheets￿under￿derivative￿financial￿instruments
(within￿other￿current￿assets￿and￿other￿non-current￿assets)￿and￿the￿carrying￿amount￿of￿the￿Eurobonds￿is￿adjusted￿for
these￿fair￿value￿changes￿only.￿Following￿the￿repurchase￿of￿part￿of￿our￿EUR￿600￿million￿5.75￿percent￿senior￿notes￿due
2017,￿the￿corresponding￿part￿of￿the￿interest￿rate￿swaps￿was￿simultaneously￿terminated￿in￿2013.

The￿following￿table￿summarizes￿the￿estimated￿fair￿value￿of￿our￿Eurobonds:

As of December 31
(in thousands)
Principal￿amount
Carrying￿amount
Fair￿value1

2014
EUR
988,153
1,105,599
1,139,628

2013
EUR
988,153
1,021,930
1,028,238

1

Source:￿Bloomberg￿Finance￿LP

The￿fair￿value￿of￿our￿Eurobonds￿is￿estimated￿based￿on￿quoted￿market￿prices￿as￿of￿December￿31,￿2014.￿Due￿to￿changes
in￿market￿interest￿rates￿and￿credit￿spreads￿since￿the￿issue￿of￿our￿Eurobonds￿which￿carry￿a￿fixed￿coupon￿interest￿rate,￿the
fair￿value￿deviates￿from￿the￿principal￿amount.

16. Lines of Credit
Our￿available￿credit￿facilities￿amount￿to￿EUR￿700.0￿million￿as￿of￿December￿31,￿2014￿and￿EUR￿700.0￿million￿as￿of
December￿31,￿2013.￿No￿amounts￿were￿outstanding￿under￿these￿credit￿facilities￿at￿the￿end￿of￿2014￿and￿2013.

The￿amounts￿available￿at￿December￿31,￿2014￿and￿2013￿consist￿of￿one￿EUR￿700￿million￿committed￿revolving￿credit
facility￿from￿a￿group￿of￿banks￿that￿will￿mature￿in￿2018.￿The￿credit￿facility￿contains￿a￿restrictive￿covenant￿that￿requires￿us
to￿maintain￿a￿minimum￿long-term￿committed￿capital￿to￿net￿total￿assets￿ratio￿of￿40.0￿percent￿calculated￿in￿accordance
with￿contractually￿agreed￿definitions.￿Long-term￿committed￿capital￿includes,￿among￿other￿things,￿shareholders’￿equity
and￿debt￿maturing￿at￿least￿one￿year￿after￿the￿maturity￿date￿of￿the￿credit￿facility,￿while￿net￿total￿assets￿mainly￿comprises
total￿assets￿minus￿cash,￿cash￿equivalents￿and￿certain￿short-term￿investments.￿Furthermore,￿adjustments￿are￿made
for￿e.g.￿intangibles￿and￿operating￿leases. As￿of￿December￿31,￿2014￿this￿ratio￿was￿82.8￿percent￿(2013:￿89.6￿percent).
Therefore,￿we￿were￿in￿compliance￿with￿the￿covenant￿at￿the￿end￿of￿2014￿and￿2013.￿Outstanding￿amounts￿under￿this￿credit
facility￿will￿bear￿interest￿at￿EURIBOR￿or￿LIBOR￿plus￿a￿margin￿that￿depends￿on￿our￿liquidity￿position.

17. Commitments, Contingencies and Guarantees
We￿have￿various￿contractual￿obligations,￿some￿of￿which￿are￿required￿to￿be￿recorded￿as￿liabilities￿in￿our￿Financial
Statements,￿including￿long-￿and￿short-term￿debt.￿Other￿contractual￿obligations,￿namely￿operating￿lease￿commitments,
purchase￿obligations￿and￿guarantees,￿are￿generally￿not￿required￿to￿be￿recognized￿as￿liabilities￿on￿our￿Consolidated
Balance￿Sheets￿but￿are￿required￿to￿be￿disclosed.

ASML￿ANNUAL￿REPORT￿2014

F-30

Our￿contractual￿obligations￿as￿of￿December￿31,￿2014￿can￿be￿summarized￿as￿follows:

Payments due by period
(in thousands)

Total
EUR

1 year
EUR

2 year
EUR

3 year
EUR

Long-Term￿Debt￿Obligations,￿including￿interest￿expense1 1,311,503
89,209

Operating￿Lease￿Obligations

44,958
29,280
Purchase￿Obligations 1,588,977 1,464,451
-

83,738

Unrecognized￿Tax￿Benefits,￿including￿interest￿expense

45,302
22,590
113,606
12,813

283,058
11,534
10,186
14,092

4 year
EUR

54,155
8,256
158
2,858

5 year
EUR

27,075
6,961
556
2,367

After
5 years
EUR

856,955
10,588
20
51,608

Total Contractual Obligations 3,073,427 1,538,689

194,311

318,870

65,427

36,959

919,171

1

See￿Note￿15￿to￿our￿Financial￿Statements￿for￿the￿amounts￿excluding￿interest￿expense.

Long-term￿debt￿obligations￿mainly￿relate￿to￿interest￿payments￿and￿principal￿amounts￿of￿our￿Eurobonds.￿See￿Note￿15￿to
our￿Financial￿Statements.

Operating￿lease￿obligations￿include￿leases￿of￿equipment￿and￿facilities.￿Lease￿payments￿recognized￿as￿an￿expense
were￿EUR￿43.9￿million,￿EUR￿42.0￿million￿and￿EUR￿41.6￿million￿for￿the￿years￿ended￿December￿31,￿2014,￿2013￿and￿2012,
respectively.

Several￿operating￿leases￿for￿our￿buildings￿contain￿purchase￿options,￿exercisable￿at￿the￿end￿of￿the￿lease,￿and￿in￿some
cases,￿during￿the￿term￿of￿the￿lease.￿The￿amounts￿to￿be￿paid￿if￿ASML￿should￿exercise￿these￿purchase￿options￿at￿the￿end
of￿the￿lease￿as￿of￿December￿31,￿2014￿can￿be￿summarized￿as￿follows:

Purchase options due by period
(in thousands)
Purchase￿options

Total
EUR
13,983

1 year
EUR
-

2 year
EUR
13,983

3 year
EUR
-

4 year
EUR
-

5 year
EUR
-

After 5
years
EUR
-

Purchase￿obligations￿include￿purchase￿commitments￿with￿suppliers￿in￿the￿ordinary￿course￿of￿business.￿ASML￿expects
that￿it￿will￿honor￿these￿purchase￿obligations￿to￿fulfill￿future￿sales,￿in￿line￿with￿the￿timing￿of￿those￿future￿sales.￿The￿general
terms￿and￿conditions￿of￿the￿agreements￿relating￿to￿the￿major￿part￿of￿our￿purchase￿commitments￿as￿of￿December￿31,
2014￿contain￿clauses￿that￿enable￿us￿to￿delay￿or￿cancel￿delivery￿of￿ordered￿goods￿and￿services￿up￿to￿the￿dates￿specified
in￿the￿corresponding￿purchase￿contracts.￿These￿terms￿and￿conditions￿that￿we￿typically￿agree￿with￿our￿supply￿chain
partners￿gives￿us￿additional￿flexibility￿to￿adapt￿our￿purchase￿obligations￿to￿our￿requirements￿in￿light￿of￿the￿inherent
cyclicality￿of￿the￿industry￿in￿which￿we￿operate.￿We￿establish￿a￿provision￿for￿cancellation￿costs￿when￿it￿is￿probable￿that
the￿liability￿has￿been￿incurred￿and￿the￿amount￿of￿cancellation￿fees￿is￿reasonably￿estimable.

We￿have￿a￿non-committed￿guarantee￿facility￿of￿EUR￿25.0￿million￿under￿which￿guarantees￿in￿the￿ordinary￿course￿of
business￿can￿be￿provided￿to￿third￿parties.

18. Employee Benefits
Our￿bonus￿expenses￿for￿the￿BoM,￿former￿BoM￿and￿senior￿management￿were￿as￿follows:

Year ended December 31
(in thousands)

2014
EUR

Bonus￿expenses

48,957

2013
EUR

32,698

2012
EUR

16,474

Bonus￿expenses￿include￿an￿amount￿of￿EUR￿3.5￿million￿(2013:￿EUR￿2.1￿million;￿2012:￿EUR￿1.8￿million)￿in￿relation￿to￿the
STI￿cash￿bonus￿for￿our￿BoM￿and￿former￿BoM.￿The￿increase￿in￿bonus￿expenses￿in￿2014￿compared￿to￿2013￿is￿mainly
attributable￿to￿the￿full￿year￿inclusion￿of￿Cymer.

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We￿have￿a￿performance￿related￿bonus￿plan￿for￿our￿senior￿management,￿who￿are￿not￿members￿of￿the￿BoM.￿Under￿this
plan,￿the￿bonus￿amounts￿depend￿on￿actual￿performance￿against￿corporate￿and￿personal￿targets.￿Within￿ASML,￿the
bonus￿for￿members￿of￿senior￿management￿can￿range￿between￿0.0￿percent￿and￿75.0￿percent￿of￿their￿annual￿salaries.
Within￿Cymer,￿bonuses￿can￿range￿between￿0.0￿percent￿and￿200.0￿percent￿of￿their￿annual￿salary.￿The￿performance￿targets
are￿set￿for￿a￿whole￿year.￿The￿bonuses￿over￿2014￿are￿accrued￿for￿in￿the￿Consolidated￿Balance￿Sheets￿as￿of￿December￿31,
2014￿and￿are￿expected￿to￿be￿paid￿in￿the￿first￿quarter￿of￿2015.

Our￿bonus￿expenses￿under￿these￿plans￿were￿as￿follows:

Year ended December 31
(in thousands)

2014
EUR

2013
EUR

2012
EUR

Bonus￿expenses

45,462

30,631

14,588

Profit-sharing Plan
We￿have￿a￿profit-sharing￿plan￿covering￿all￿European￿and￿US￿non-sales￿employees￿who￿are￿not￿members￿of￿the￿BoM￿or
senior￿management.￿Under￿the￿plan,￿eligible￿employees￿receive￿an￿annual￿profit-sharing,￿based￿on￿a￿percentage￿of￿net
income￿relative￿to￿total￿net￿sales￿ranging￿from￿0.0￿to￿20.0￿percent￿of￿their￿annual￿salary.￿The￿profit￿sharing￿for￿the￿years
2014,￿2013￿and￿2012￿was￿16.0￿percent￿or￿EUR￿71.3￿million,￿14.0￿percent￿or￿EUR￿55.9￿million￿and￿18.0￿percent￿or￿EUR
64.5￿million,￿respectively.￿Our￿profit￿is￿also￿one￿of￿the￿criteria￿for￿the￿individual￿variable￿pay￿programs￿for￿employees
in￿Asia￿and￿employees￿eligible￿to￿the￿sales￿reward￿plan,￿which￿amount￿to￿EUR￿28.0￿million￿for￿2014￿(including￿EUR￿2.1
million￿for￿the￿sales￿reward￿plan),￿EUR￿25.8￿million￿(including￿EUR￿2.3￿million￿for￿the￿sales￿reward￿plan)￿for￿2013￿and
EUR￿24.4￿million￿(including￿EUR￿2.6￿million￿for￿the￿sales￿reward￿plan)￿for￿2012.

Share-based Compensation
In￿the￿past￿we￿have￿adopted￿various￿share￿and￿option￿plans￿for￿our￿employees.￿Starting￿January￿1,￿2014￿the￿Employee
Umbrella￿Share￿Plan￿has￿become￿effective,￿covering￿all￿grants￿made￿as￿of￿that￿date￿for￿our￿employees.￿The￿AGM
approves￿each￿year￿the￿maximum￿number￿of￿shares￿that￿can￿be￿used￿by￿ASML￿to￿execute￿share-based￿incentives.
Within￿this￿limit,￿the￿Supervisory￿Board￿determines￿the￿maximum￿number￿of￿shares￿that￿is￿granted￿to￿the￿BoM￿in￿line
with￿the￿2014￿Remuneration￿Policy￿and￿the￿BoM￿determines￿the￿total￿maximum￿of￿shares￿that￿can￿be￿granted￿in￿that
year￿for￿eligible￿employees￿in￿line￿with￿existing￿policies.￿Our￿current￿share-based￿compensation￿plans￿do￿not￿provide
cash￿settlement￿of￿options￿and￿shares.

The￿total￿gross￿amount￿of￿recognized￿compensation￿expenses￿associated￿with￿share-based￿payments￿(including￿share-
based￿payments￿to￿the￿BoM)￿was￿EUR￿63.4￿million￿in￿2014,￿EUR￿52.4￿million￿in￿2013￿and￿EUR￿18.7￿million￿in￿2012.
The￿tax￿benefit￿recognized￿related￿to￿the￿recognized￿share-based￿compensation￿costs￿amounted￿to￿EUR￿14.9￿million￿in
2014,￿EUR￿10.7￿million￿in￿2013￿and￿EUR￿0.9￿million￿in￿2012.￿

Total￿compensation￿costs￿to￿be￿recognized￿in￿future￿periods￿amount￿to￿EUR￿69.8￿million￿as￿of￿December￿31,￿2014￿(2013:
EUR￿78.9￿million;￿2012:￿EUR￿30.4￿million).￿The￿weighted￿average￿period￿over￿which￿these￿costs￿are￿expected￿to￿be
recognized￿is￿calculated￿at￿1.6￿years￿(2013:￿1.6￿years;￿2012:￿2.0￿years).￿

Employee Umbrella Share Plan
The￿Employee￿Umbrella￿Share￿Plan,￿effective￿as￿of￿January￿1,￿2014￿covers￿all￿employees.￿Within￿this￿plan,￿we
distinguish￿between￿performance￿and￿incentive￿shares.￿Within￿the￿incentive￿category,￿employees￿can￿choose,￿at
inception,￿to￿convert￿the￿shares￿into￿options.￿All￿grants￿under￿the￿Employee￿Umbrella￿Share￿Plan￿typically￿have￿a￿three
year￿vesting￿period.

Share plans
Our￿current￿share￿plans￿typically￿include￿a￿three￿year￿service￿period￿and￿some￿plans￿have￿vesting￿conditions￿which
are￿based￿on￿performance.￿The￿fair￿value￿of￿shares￿is￿determined￿on￿the￿closing￿trading￿price￿of￿our￿shares￿listed￿at
Euronext￿Amsterdam￿on￿the￿grant￿date.

ASML￿ANNUAL￿REPORT￿2014

F-32

Details￿with￿respect￿to￿shares￿granted￿during￿the￿year￿are￿set￿out￿in￿the￿following￿table:

Year ended December 31

2014

2013

2012

2014

2013

2012

EUR-
denominated

USD-
denominated

Total￿fair￿value￿at￿vesting￿date￿of￿shares￿vested￿during￿the￿year￿(in￿thousands)
Weighted￿average￿fair￿value￿of￿shares￿granted

56,214
65.71

38,280
55.83

16,179
36.15

76,605
84.62

51,798
83.58

5,392
47.71

A￿summary￿of￿the￿status￿of￿conditionally￿outstanding￿shares￿as￿of￿December￿31,￿2014,￿and￿changes￿during￿the￿year
ended￿December￿31,￿2014,￿is￿presented￿below:

EUR-denominated

USD-denominated

Conditional shares outstanding at January 1, 2014
Granted
Vested
Forfeited
Conditional shares outstanding at December 31, 2014

Number of
shares
1,544,332
409,626
(847,131)
(13,649)
1,093,178

Weighted
average
fair value at
grant date
(EUR)
40.21
65.71
34.78
40.83
53.96

Number of
shares
1,380,320
475,146
(872,231)
(62,020)
921,215

Weighted
average
fair value at
grant date
(USD)
79.55
84.62
79.56
79.57
82.16

Option Plans
Our￿current￿option￿plans￿typically￿vest￿over￿a￿three￿year￿service￿period￿with￿any￿unexercised￿stock￿options￿expiring￿ten
years￿after￿the￿grant￿date.￿Options￿granted￿have￿fixed￿exercise￿prices￿equal￿to￿the￿closing￿price￿of￿our￿shares￿listed￿at
Euronext￿Amsterdam￿on￿grant￿date.￿The￿fair￿value￿of￿stock￿options￿is￿determined￿using￿a￿Black-Scholes￿option￿valuation
model.

The￿Black-Scholes￿option￿valuation￿of￿our￿stock￿options￿is￿based￿on￿the￿following￿assumptions:

Year ended December 31

Weighted￿average￿share￿price￿(in￿EUR)
Volatility￿(in￿percentage)
Expected￿life￿(in￿years)
Risk￿free￿interest￿rate
Expected￿dividend￿yield￿(in￿EUR)
Forfeiture￿rate1

2014

65.0
23.5
5.6
0.5
2.25
-

2013

60.6
27.0
5.6
0.8
2.00
-

2012

39.2
25.6
5.0
2.1
1.45
-

1

For￿the￿years￿ending￿December￿31,￿2014,￿2013￿and￿2012,￿forfeitures￿are￿estimated￿to￿be￿nil.

When￿establishing￿the￿expected￿life￿assumption￿we￿annually￿take￿into￿account￿the￿contractual￿terms￿of￿the￿stock
options￿as￿well￿as￿historical￿employee￿exercise￿behavior.

Details￿with￿respect￿to￿stock￿options￿are￿set￿out￿in￿the￿following￿table:

Year ended December 31

2014

2013

2012

2014

2013

2012

EUR-
denominated

USD-
denominated

Weighted￿average￿fair￿value￿of￿stock￿options￿granted
Weighted￿average￿share￿price￿at￿the￿exercise￿date￿of￿stock￿options
Aggregate￿intrinsic￿value￿of￿stock￿options￿exercised￿(in￿thousands)
Aggregate￿remaining￿contractual￿term￿of￿currently￿exercisable￿options￿(years)
Aggregate￿intrinsic￿value￿of￿exercisable￿stock￿options￿(in￿thousands)
Aggregate￿intrinsic￿value￿of￿outstanding￿stock￿options￿(in￿thousands)

13.94
71.69
12,098
2.94
39,020
40,428

14.22
59.53
15,924
3.09
37,441
38,718

8.97
40.45
71,331
3.59
34,438
35,671

18.57
93.19
9,497
3.79
17,942
19,171

21.74
77.25
11,086
3.12
22,781
25,369

11.87
50.88
12,684
3.17
21,882
22,433

ASML￿ANNUAL￿REPORT￿2014

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The￿number￿and￿weighted￿average￿exercise￿prices￿of￿stock￿options￿as￿of￿December￿31,￿2014,￿and￿changes￿during￿the
year￿then￿ended￿are￿presented￿below:

EUR-denominated

USD-denominated

Outstanding,￿January￿1,￿2014
Granted
Exercised
Forfeited
Expired
Outstanding, December 31, 2014
Exercisable,￿December￿31,￿2014

Number of
options
782,302
32,672
(212,530)
(1,350)
(1,338)
599,756
559,556

Weighted
average
exercise price
per ordinary
share (EUR)
18.55
65.68
14.77
21.48
14.70
22.09
19.77

Number of
options
406,635
20,654
(129,530)
(12,587)
-
285,172
246,285

Weighted
average
exercise price
per ordinary
share (USD)
31.31
87.98
19.87
31.51
-
40.60
34.98

Details￿with￿respect￿to￿the￿stock￿options￿outstanding￿are￿set￿out￿in￿the￿following￿table:

EUR-denominated

USD-denominated

Range of exercise
prices (EUR)
0￿-￿10
10￿-￿15
15￿-￿20
20￿-￿25
25￿-￿40
40￿-￿50
50￿-￿60
60￿-￿70
70￿-￿80
80￿-￿90
90￿-￿100
Total

Number of
outstanding options
at December 31, 2014
-
220,179
160,772
126,712
16,736
23,959
13,593
27,239
10,566
-
-
599,756

Weighted average
remaining contractual
life of outstanding
options (years)
-
2.28
2.15
2.94
6.77
7.80
8.88
8.93
9.81
-
-
3.31

Range of exercise
prices (USD)
0￿-￿10
10￿-￿15
15￿-￿20
20￿-￿25
25￿-￿40
40￿-￿50
50￿-￿60
60￿-￿70
70￿-￿80
80￿-￿90
90￿-￿100
Total

Number of
outstanding options
at December 31, 2014
14,543
48,397
3,911
66,462
58,168
1,082
8,382
1,281
43,860
15,005
24,081
285,172

Weighted average
remaining contractual
life of outstanding
options (years)
1.07
0.18
3.80
2.97
3.87
6.59
7.73
8.07
8.14
9.22
9.11
4.41

Employee Purchase Plan
Every￿quarter,￿we￿offer￿our￿worldwide￿payroll￿employees￿the￿opportunity￿to￿buy￿our￿shares￿or￿our￿stock￿options￿against
fair￿value￿using￿their￿net￿salary.￿The￿BoM￿is￿excluded￿from￿participation￿in￿this￿plan.￿The￿fair￿value￿for￿shares￿is￿based
on￿the￿closing￿price￿of￿our￿shares￿listed￿at￿Euronext￿Amsterdam￿on￿grant￿date.￿Within￿the￿employee￿purchase￿plan
employees￿can￿choose￿to￿convert￿the￿shares￿into￿options.￿The￿fair￿value￿of￿the￿stock￿options￿is￿determined￿using￿a
Black-Scholes￿option￿valuation￿model.￿The￿assumptions￿on￿which￿the￿Black-Scholes￿option￿valuation￿model￿is￿used,￿see
the￿disclosure￿above￿under￿the￿caption￿"Option￿Plans".￿The￿maximum￿net￿amount￿for￿which￿employees￿can￿participate
in￿the￿plan￿amounts￿to￿10.0￿percent￿of￿their￿annual￿gross￿base￿salary.￿When￿employees￿retain￿the￿shares￿and/or￿stock
options￿for￿a￿minimum￿of￿12￿months,￿we￿will￿pay￿out￿a￿20.0￿percent￿cash￿bonus￿on￿the￿initial￿participation￿amount.

Deferred Compensation Plans
In￿July￿2002,￿we￿adopted￿a￿non-qualified￿deferred￿compensation￿plan￿for￿our￿US￿employees￿that￿allows￿a￿select￿group
of￿management￿or￿highly￿compensated￿employees￿to￿defer￿a￿portion￿of￿their￿salary,￿bonus,￿and￿commissions.￿The￿plan
allows￿us￿to￿credit￿additional￿amounts￿to￿the￿participants’￿account￿balances.￿The￿participants￿divide￿their￿funds￿among
the￿investments￿available￿in￿the￿plan.￿Participants￿elect￿to￿receive￿their￿funds￿in￿future￿periods￿after￿the￿earlier￿of￿their
employment￿termination￿or￿their￿withdrawal￿election,￿at￿least￿three￿years￿after￿deferral.￿There￿were￿minor￿expenses
relating￿to￿this￿plan￿in￿2014,￿2013￿and￿2012.￿Cymer￿has￿a￿similar￿non-qualified￿deferred￿compensation￿plan￿for￿a
selected￿group￿of￿management￿level￿employees￿in￿the￿US￿in￿which￿the￿employee￿may￿elect￿to￿defer￿receipt￿of￿current
compensation￿in￿order￿to￿provide￿retirement￿and￿other￿benefits￿on￿behalf￿of￿such￿employee￿backed￿by￿Cymer￿owned￿life
insurance￿policies.

As￿of￿December￿31,￿2014,￿and￿2013,￿our￿liability￿under￿deferred￿compensation￿plans￿was￿EUR￿29.4￿million￿and￿EUR￿23.5
million,￿respectively.

ASML￿ANNUAL￿REPORT￿2014

F-34

Pension Plans
We￿maintain￿various￿pension￿plans￿covering￿substantially￿all￿of￿our￿employees.￿Eligible￿employees￿in￿the￿Netherlands,
5,802￿FTEs,￿participate￿in￿a￿multi-employer￿union￿plan￿(PME)￿determined￿in￿accordance￿with￿the￿collective￿bargaining
agreements￿effective￿for￿the￿industry￿in￿which￿we￿operate.￿This￿collective￿bargaining￿agreement￿has￿no￿expiration
date.￿This￿multi-employer￿union￿plan￿covers￿approximately￿1,259￿companies￿and￿approximately￿144,000￿contributing
members.￿Our￿contribution￿to￿the￿multi-employer￿union￿plan￿was￿5.7￿percent￿of￿the￿total￿contribution￿to￿the￿plan￿as￿per
the￿Annual￿Report￿for￿the￿year￿ended￿December￿31,￿2013.￿The￿plan￿monitors￿its￿risks￿on￿a￿global￿basis,￿not￿by￿company
or￿employee,￿and￿is￿subject￿to￿regulation￿by￿Dutch￿governmental￿authorities.￿By￿law￿(the￿Dutch￿Pension￿Act),￿a￿multi-
employer￿union￿plan￿must￿be￿monitored￿against￿specific￿criteria,￿including￿the￿coverage￿ratio￿of￿the￿plan's￿assets￿to￿its
obligations.￿As￿of￿January￿1,￿2015￿new￿pension￿legislation￿has￿been￿enacted.￿This￿legislation￿results￿in￿amongst￿others,
an￿increase￿of￿legally￿required￿coverage￿levels.￿The￿coverage￿percentage￿is￿calculated￿by￿dividing￿the￿funds￿capital￿by
the￿total￿sum￿of￿pension￿liabilities￿and￿is￿based￿on￿actual￿market￿interes￿rates.￿The￿coverage￿ratio￿as￿per￿December
31,￿2014￿of￿102.0￿percent￿(December￿31,￿2013:￿103.4￿percent)￿is￿calculated￿giving￿consideration￿to￿the￿new￿pension
legislation￿and￿is￿below￿the￿legally￿required￿level.￿We￿have￿however￿no￿obligation￿whatsoever￿to￿pay￿off￿any￿deficits￿the
pension￿fund￿may￿incur,￿nor￿have￿we￿any￿claim￿to￿any￿potential￿surpluses.

Every￿company￿participating￿in￿the￿multi-employer￿union￿plan￿(PME)￿contributes￿a￿premium￿calculated￿as￿a￿percentage
of￿its￿total￿pensionable￿salaries,￿with￿each￿company￿subject￿to￿the￿same￿percentage￿contribution￿rate.￿Although￿the
premium￿can￿fluctuate￿yearly￿based￿on￿the￿coverage￿ratio￿of￿the￿multi-employer￿union￿plan,￿for￿the￿5-year￿period
2015-2019￿the￿contribution￿percentage￿has￿been￿fixed￿at￿23.6￿percent￿(2014:￿24.1￿percent).￿The￿pension￿rights￿of￿each
employee￿are￿based￿upon￿the￿employee's￿average￿salary￿during￿employment.

Our￿net￿periodic￿pension￿cost￿for￿this￿multi-employer￿union￿plan￿for￿any￿period￿is￿the￿amount￿of￿the￿required￿employer
contribution￿for￿that￿period.

We￿also￿participate￿in￿several￿defined￿contribution￿pension￿plans,￿with￿our￿expenses￿for￿these￿plans￿equaling￿the
employer￿contributions￿made￿in￿the￿relevant￿period.

Our￿pension￿and￿retirement￿expenses￿for￿all￿employees￿for￿the￿years￿ended￿December￿31,￿2014,￿2013￿and￿2012￿were:

Year ended December 31
(in thousands)

Pension￿plan￿based￿on￿multi-employer￿union￿plan
Pension￿plans￿based￿on￿defined￿contribution

Pension and retirement expenses

2014
EUR

46,542
24,774

71,316

2013
EUR

40,476
19,799

60,275

2012
EUR

34,525
15,773

50,298

19. Legal Contingencies
ASML￿is￿party￿to￿various￿legal￿proceedings￿generally￿incidental￿to￿our￿business.￿ASML￿also￿faces￿exposures￿from
other￿actual￿or￿potential￿claims￿and￿legal￿proceedings.￿In￿addition,￿ASML's￿customers￿may￿be￿subject￿to￿claims￿of
infringement￿from￿third￿parties￿alleging￿that￿the￿ASML￿equipment￿used￿by￿those￿customers￿in￿the￿manufacture￿of
semiconductor￿products,￿and/or￿the￿methods￿relating￿to￿use￿of￿the￿ASML￿equipment,￿infringes￿one￿or￿more￿patents
issued￿to￿those￿third￿parties.￿If￿these￿claims￿were￿successful,￿ASML￿could￿be￿required￿to￿indemnify￿such￿customers￿for
some￿or￿all￿of￿the￿losses￿incurred￿or￿damages￿assessed￿against￿them￿as￿a￿result￿of￿that￿infringement.

We￿accrue￿for￿legal￿costs￿related￿to￿litigation￿and￿legal￿proceedings￿in￿our￿Consolidated￿Statements￿of￿Operations￿at
the￿time￿when￿the￿related￿legal￿services￿are￿actually￿provided￿to￿ASML.￿In￿2014,￿EUR￿12.9￿million￿estimated￿losses￿were
recorded￿as￿a￿charge￿to￿our￿Consolidated￿Statements￿of￿Operations￿(2013:￿EUR￿3.2￿million￿and￿2012:￿no￿estimated
losses￿were￿recorded).

From￿late￿2001￿through￿2004,￿ASML￿was￿a￿party￿to￿a￿series￿of￿civil￿litigations￿and￿administrative￿proceedings￿in￿which
Nikon￿alleged￿ASML's￿infringement￿of￿Nikon￿patents￿relating￿to￿lithography.￿ASML￿in￿turn￿filed￿claims￿against￿Nikon.
Pursuant￿to￿agreements￿executed￿on￿December￿10,￿2004,￿ASML￿and￿Nikon￿agreed￿to￿settle￿all￿pending￿worldwide
patent￿litigation￿between￿the￿companies.￿The￿settlement￿included￿an￿exchange￿of￿releases,￿a￿patent￿cross-license
agreement￿related￿to￿lithography￿equipment￿used￿to￿manufacture￿semiconductor￿devices,￿and￿payments￿to￿Nikon￿by
ASML.

ASML￿ANNUAL￿REPORT￿2014

F-35

In￿2004,￿the￿Nikon￿Cross-License￿Agreement￿was￿signed.￿Under￿the￿Nikon￿Cross-License￿Agreement,￿(i)￿ASML￿granted
Nikon￿a￿non-exclusive￿license￿to￿manufacture￿and￿sell￿lithography￿equipment￿under￿patents￿owned￿or￿otherwise
sublicensable￿by￿ASML￿and￿(ii)￿Nikon￿granted￿ASML￿a￿non-exclusive￿license￿to￿manufacture￿and￿sell￿lithography
equipment￿under￿patents￿owned￿or￿otherwise￿sublicensable￿by￿Nikon.￿These￿license￿grants￿cover￿patents￿having￿an
effective￿application￿date￿before￿December￿31,￿2002￿("Class￿A￿Patents"),￿as￿well￿as￿patents￿with￿an￿effective￿application
date￿after￿December￿31,￿2002￿that￿were￿issued￿worldwide￿before￿the￿end￿of￿2009￿("Class￿B￿Patents"),￿but￿exclude
certain￿specified￿patents￿set￿forth￿in￿the￿Nikon￿Cross-License￿Agreement.￿The￿license￿period￿is￿perpetual￿for￿Class￿A
Patents,￿and￿the￿licenses￿for￿Class￿B￿Patents￿terminated￿at￿the￿end￿of￿2009.

At￿any￿time￿until￿June￿30,￿2015,￿each￿of￿ASML￿and￿Nikon￿has￿a￿right￿to￿designate￿up￿to￿five￿Class￿B￿patents￿(or￿patents
related￿to￿lithography￿issued￿from￿2010￿to￿2015)￿of￿the￿other￿party￿as￿Class￿A￿patents.￿Any￿patents￿acquired￿after￿the
date￿of￿the￿Nikon￿Cross-License￿Agreement￿are￿deemed￿Class￿B￿Patents.￿In￿addition,￿pursuant￿to￿the￿terms￿of￿the￿Nikon
Cross-License￿Agreement,￿the￿parties￿have￿agreed,￿from￿January￿1,￿2010￿through￿December￿31,￿2014,￿not￿to￿bring
suit￿for￿claims￿related￿to￿infringement￿of￿patents￿issued￿and￿not￿perpetually￿licensed,￿including￿the￿Class￿B￿Patents.
Under￿the￿terms￿of￿the￿Nikon￿Cross-License￿Agreement,￿beginning￿on￿January￿1,￿2015,￿the￿parties￿may￿bring￿suit￿for
infringement￿of￿certain￿patents￿subject￿to￿the￿agreement,￿including￿any￿infringement￿that￿occurred￿from￿January￿1,
2010￿through￿December￿31,￿2014.￿Damages￿resulting￿from￿claims￿for￿patent￿infringement￿occurring￿during￿the￿Cross-
License￿Transition￿Period￿are￿limited￿to￿three￿percent￿of￿the￿net￿sales￿price￿of￿applicable￿licensed￿products￿or￿optical
components.

Accordingly,￿from￿January￿1,￿2015,￿both￿Nikon￿and￿we￿are￿no￿longer￿prohibited￿under￿the￿agreement￿from￿bringing
claims￿against￿each￿other￿on￿the￿basis￿of￿infringement￿of￿certain￿patents￿subject￿to￿the￿Nikon￿Cross-License￿Agreement.

If￿Nikon￿files￿suit￿against￿us￿alleging￿patent￿infringement,￿we￿may￿incur￿substantial￿legal￿fees￿and￿expenses,￿and￿we￿may
not￿prevail.￿Similarly,￿if￿we￿file￿suit￿against￿Nikon￿alleging￿patent￿infringement,￿we￿may￿incur￿substantial￿legal￿fees￿and
expenses,￿and￿we￿may￿not￿prevail.￿Patent￿litigation￿is￿complex￿and￿may￿extend￿for￿a￿protracted￿period￿of￿time,￿giving
rise￿to￿the￿potential￿for￿both￿substantial￿costs￿and￿diverting￿the￿attention￿of￿key￿management￿and￿technical￿personnel.
Potential￿adverse￿outcomes￿from￿patent￿litigation￿may￿include,￿without￿limitation,￿payment￿of￿significant￿monetary
damages,￿injunctive￿relief￿prohibiting￿the￿sale￿of￿products,￿and/or￿settlement￿involving￿significant￿costs￿to￿be￿paid￿by￿us,
any￿of￿which￿may￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and/or￿results￿of￿operations.￿We￿are
unable￿to￿predict￿at￿this￿time￿whether￿any￿such￿patent￿suit￿will￿in￿fact￿materialize,￿or,￿if￿so,￿what￿its￿outcome￿might￿be.

20. Income Taxes
The￿components￿of￿the￿provision￿for￿income￿taxes￿are￿as￿follows:

Year ended December 31
(in thousands)

Current tax
Deferred tax
Provision for income taxes

2014
EUR

(130,425)
53,430
(76,995)

2013
EUR

(52,753)
44,766
(7,987)

2012
EUR

(79,255)
74,993
(4,262)

The￿Dutch￿statutory￿tax￿rate￿was￿25.0￿percent￿in￿2014,￿2013￿and￿2012.￿Tax￿amounts￿in￿other￿jurisdictions￿are￿calculated
at￿the￿rates￿prevailing￿in￿the￿relevant￿jurisdictions.

The￿reconciliation￿of￿the￿provision￿for￿income￿taxes￿is￿as￿follows:

Year ended December 31
(in thousands)

Income￿tax￿provision￿based￿on￿ASML's￿domestic￿rate
Effects￿of￿tax￿rates￿in￿foreign￿jurisdictions
Adjustments￿in￿respect￿of￿tax￿exempt￿income
Adjustments￿in￿respect￿of￿tax￿incentives
Adjustments￿in￿respect￿of￿prior￿years'￿current￿taxes
Adjustments￿in￿respect￿of￿prior￿years'￿deferred￿taxes
Movements￿in￿the￿liability￿for￿unrecognized￿tax￿benefits
Tax￿effects￿in￿respect￿of￿Cymer￿acquisition￿related￿items
Other￿credits￿and￿non-taxable￿items
Provision for income taxes

2014
EUR
Income before income taxes 1,273,635
(318,409)
(1,580)
23,899
159,728
(6,474)
1,325
(9,669)
77,909
(3,724)
(76,995)

ASML￿ANNUAL￿REPORT￿2014

F-36

%

2013
EUR
100.0 1,023,477
(255,869)
23,459
29,430
120,751
5,155
16,164
(7,588)
67,730
(7,219)
(7,987)

25.0
0.1
(1.9)
(12.5)
0.5
(0.1)
0.8
(6.1)
0.3
6.0

%

2012
EUR
100.0 1,150,578
(287,644)
9,786
23,532
143,160
18,275
-
95,465
-
(6,836)
(4,262)

25.0
(2.3)
(2.9)
(11.7)
(0.5)
(1.6)
0.7
(6.6)
0.7
0.8

%
100.0
25.0
(0.9)
(2.0)
(12.4)
(1.6)
-
(8.3)
-
0.6
0.4

Income Tax Provision Based on ASML's Domestic Rate
The￿provision￿for￿income￿taxes￿based￿on￿ASML's￿domestic￿rate￿is￿based￿on￿the￿Dutch￿statutory￿income￿tax￿rate.￿It
reflects￿the￿provision￿for￿income￿taxes￿that￿would￿have￿been￿applicable￿assuming￿that￿all￿of￿our￿income￿is￿taxable
against￿the￿Dutch￿statutory￿tax￿rate￿and￿there￿were￿no￿permanent￿differences￿between￿taxable￿base￿and￿financial￿results
and￿no￿Dutch￿tax￿incentives￿are￿applied.

Effects of Tax Rates in Foreign Jurisdictions
A￿portion￿of￿our￿results￿is￿realized￿in￿countries￿other￿than￿the￿Netherlands￿where￿different￿tax￿rates￿are￿applicable.￿In
2013,￿the￿distribution￿effect￿of￿tax￿rates￿in￿foreign￿jurisdictions￿was￿impacted￿by￿a￿shift￿in￿the￿mix￿of￿taxable￿income
across￿tax￿jurisdictions￿as￿a￿result￿of￿the￿acquisition￿of￿Cymer￿as￿per￿May￿30,￿2013.

Adjustments in Respect of Tax Exempt Income
In￿certain￿jurisdictions￿part￿of￿the￿income￿generated￿is￿tax￿exempted.

Adjustments in Respect of Tax Incentives
Adjustments￿in￿respect￿of￿tax￿incentives￿relate￿to￿reduced￿tax￿rates￿in￿several￿jurisdictions,￿mainly￿consisting￿of￿the
Dutch￿"Innovation￿Box"￿and￿the￿RDA.￿The￿Innovation￿box￿is￿a￿facility￿under￿Dutch￿corporate￿tax￿law￿pursuant￿to￿which
income￿associated￿with￿R&D￿is￿partially￿exempted￿from￿taxation.￿The￿RDA￿is￿a￿tax￿incentive￿providing￿for￿an￿additional
tax￿deduction￿for￿qualified￿(non-labor)￿cost￿incurred￿for￿R&D￿activities￿performed￿in￿the￿Netherlands.

Adjustments in Respect of Prior Years’ Current Taxes
In￿2012,￿we￿recognized￿a￿tax￿benefit￿of￿EUR￿18.3￿million￿or￿1.6￿percent￿of￿income￿before￿income￿taxes￿mainly
attributable￿to￿the￿application￿of￿tax￿exemptions￿for￿prior￿years,￿which￿had￿a￿favorable￿effect￿on￿the￿effective￿tax￿rate￿for
2012..

Adjustments in Respect of Prior Years’ Deferred Taxes
In￿2013,￿we￿recognized￿a￿tax￿benefit￿of￿EUR￿16.2￿million￿or￿1.6￿percent￿of￿income￿before￿income￿taxes￿as￿result￿of￿a
partly￿release￿of￿a￿valuation￿allowance￿for￿NID￿credits￿or￿NID￿stock￿to￿the￿extent￿we￿expect￿future￿taxable￿profits￿to
realize￿these￿NID￿credits￿before￿expiration￿of￿those￿credits.

Movements in the Liability for Unrecognized Tax Benefits
In￿2012,￿the￿effective￿tax￿rate￿was￿impacted￿by￿a￿tax￿benefit￿of￿EUR￿95.5￿million￿or￿8.3￿percent￿of￿income￿before￿income
taxes￿mainly￿as￿a￿result￿of￿the￿successful￿conclusion￿of￿tax￿audits￿in￿different￿jurisdictions￿(EUR￿92.5￿million)￿whereas
the￿movements￿in￿the￿liability￿for￿unrecognized￿tax￿benefits￿in￿2014￿and￿2013￿are￿considered￿to￿be￿limited.

Tax effects in respect of Cymer Acquisition related items
In￿2014￿the￿tax￿rate￿was￿favorably￿impacted￿by￿settling￿agreements￿entered￿into￿by￿ASML￿Netherlands￿B.V.￿and￿Cymer
LLC.,￿prior￿to￿our￿acquisition￿of￿Cymer￿in￿May￿2013,￿at￿different￿tax￿rates.￿In￿2013￿we￿recognized￿a￿gain￿as￿a￿result￿of￿the
accounting￿for￿business￿combinations￿Cymer.￿This￿gain￿is￿not￿recognized￿for￿tax￿purposes￿and￿was,￿apart￿from￿the￿R&D
tax￿incentives,￿the￿major￿driver￿for￿the￿change￿in￿the￿effective￿tax￿rate￿in￿2013.

Other Credits and Non-taxable Items
Other￿credits￿and￿non-taxable￿items￿reflect￿the￿impact￿on￿statutory￿rates￿of￿permanent￿non-taxable￿items￿such￿as￿non-
deductible￿taxes,￿non-deductible￿interest￿expense,￿and￿non-deductible￿meals￿and￿entertainment￿expenses,￿as￿well￿as
the￿impact￿of￿(the￿reversal￿of)￿various￿tax￿credits￿on￿our￿provision￿for￿income￿taxes.

Income Taxes Recognized Directly in Shareholders' Equity
Income￿taxes￿recognized￿directly￿in￿shareholders'￿equity￿(including￿OCI)￿are￿as￿follows:

Income tax recognized in shareholders' equity
(in thousands)
Current tax
OCI￿(financial￿instruments)
Tax￿(benefit)￿deficit￿from￿share-based￿payments
Total income tax recognized in shareholders' equity

2014
EUR

2,977
(3,972)
(995)

2013
EUR

(759)
(3,110)
(3,869)

2012
EUR

(1,066)
(2,116)
(3,182)

ASML￿ANNUAL￿REPORT￿2014

F-37

Liability for Unrecognized Tax Benefits and Deferred Taxes
The￿liability￿for￿unrecognized￿tax￿benefits￿and￿total￿deferred￿tax￿position￿recorded￿on￿the￿Consolidated￿Balance￿Sheets
are￿as￿follows:

As of December 31
(in thousands)
Liability￿for￿unrecognized￿tax￿benefits
Deferred￿tax￿position
Total

2014
EUR
(83,738)
32,715
(51,023)

2013
EUR
(74,069)
(30,176)
(104,245)

Liability for Unrecognized Tax Benefits
The￿calculation￿of￿our￿liability￿for￿unrecognized￿tax￿benefits￿involves￿uncertainties￿in￿the￿application￿of￿complex￿tax
laws.￿Our￿estimate￿for￿the￿potential￿outcome￿of￿any￿uncertain￿tax￿issue￿is￿highly￿judgmental.￿We￿conclude￿that￿we
have￿adequately￿provided￿for￿uncertain￿tax￿positions.￿However,￿settlement￿of￿these￿uncertain￿tax￿positions￿in￿a￿manner
inconsistent￿with￿our￿expectations￿could￿have￿a￿material￿impact￿on￿our￿Financial￿Statements.

Consistent￿with￿the￿provisions￿of￿ASC￿740,￿as￿of￿December￿31,￿2014,￿ASML￿has￿a￿liability￿for￿unrecognized￿tax￿benefits
of￿EUR￿83.7￿million￿(2013:￿EUR￿74.1￿million)￿which￿is￿classified￿as￿non-current￿deferred￿and￿other￿tax￿liabilities.￿The￿total
liability￿for￿unrecognized￿tax￿benefits,￿if￿reversed,￿would￿have￿a￿favorable￿effect￿on￿our￿effective￿tax￿rate.

Expected￿interest￿and￿penalties￿related￿to￿income￿tax￿liabilities￿have￿been￿accrued￿for￿and￿are￿included￿in￿the￿liability￿for
unrecognized￿tax￿benefits￿and￿in￿the￿provision￿for￿income￿taxes.￿The￿balance￿of￿accrued￿interest￿and￿penalties￿recorded
in￿the￿Consolidated￿Balance￿Sheets￿as￿of￿December￿31,￿2014￿amounted￿to￿EUR￿24.7￿million￿(2013:￿EUR￿22.9￿million).
Accrued￿interest￿and￿penalties￿recorded￿in￿the￿Consolidated￿Statement￿of￿Operations￿of￿2014￿amounted￿to￿a￿tax￿charge
of￿EUR￿1.7￿million￿(2013:￿tax￿charge￿of￿EUR￿4.1￿million;￿2012:￿tax￿benefit￿of￿EUR￿3.1￿million).

A￿reconciliation￿of￿the￿beginning￿and￿ending￿balance￿of￿the￿liability￿for￿unrecognized￿tax￿benefits￿is￿as￿follows:

As of December 31
(in thousands)
Balance,￿January￿1
Gross￿increases￿–￿tax￿positions￿in￿prior￿period
Gross￿decreases￿–￿tax￿positions￿in￿prior￿period
Gross￿increases￿–￿tax￿positions￿in￿current￿period
Acquisitions￿through￿business￿combinations
Settlements
Lapse￿of￿statute￿of￿limitations
Total liability for unrecognized tax benefits

2014
EUR
74,069
10,185
(12,743)
12,227
-
-
-
83,738

2013
EUR
59,967
6,045
(2,025)
6,796
6,514
(2,964)
(264)
74,069

We￿conclude￿our￿allowances￿for￿tax￿contingencies￿to￿be￿appropriate.￿Based￿on￿the￿information￿currently￿available,
we￿do￿not￿anticipate￿a￿significant￿increase￿or￿decrease￿in￿our￿liability￿for￿unrecognized￿tax￿benefits￿within￿the￿next￿12
months.

We￿are￿subject￿to￿tax￿audits￿in￿certain￿of￿our￿major￿tax￿jurisdictions,￿for￿years￿from￿and￿including￿2009￿onwards￿in
Korea￿and￿for￿years￿from￿and￿including￿2007￿onwards￿in￿the￿US.￿In￿the￿course￿of￿such￿audits,￿local￿tax￿authorities￿may
challenge￿the￿positions￿taken￿by￿us.￿

ASML￿ANNUAL￿REPORT￿2014

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Deferred taxes
The￿composition￿of￿total￿deferred￿tax￿assets￿and￿liabilities￿reconciled￿to￿the￿classification￿in￿the￿Consolidated￿Balance
Sheets￿is￿as￿follows:

January 1,
2014
EUR

Consolidated
Statements of
Operations
EUR

Effect of changes
in exchange rates
EUR

December
31,
2014
EUR

Deferred taxes
(in thousands)
Deferred tax assets:
Capitalized￿R&D￿expenditures
R&D￿credits
Inventories
Deferred￿revenue
Accrued￿and￿other￿liabilities
Installation￿and￿warranty￿reserve
Tax￿effect￿carry-forward￿losses
Property,￿plant￿and￿equipment
Restructuring￿and￿impairment
Alternative￿minimum￿tax￿credits1
Share-based￿payments
Other￿temporary￿differences
Total deferred tax assets2

Deferred tax liabilities:
Intangible￿fixed￿assets
Property,￿plant￿and￿equipment
Borrowing￿costs
Other￿temporary￿differences
Total deferred tax liabilities

20,888
11,242
46,661
16,409
45,460
6,702
67,282
11,785
3,361
6,342
16,151
11,661
263,944

(261,905)
(17,592)
(1,823)
(12,800)
(294,120)

Net deferred tax assets (liabilities)

(30,176)

Classified￿as:
Deferred￿tax￿assets￿-￿current
Deferred￿tax￿assets￿-￿non-current
Deferred￿tax￿liabilities￿-￿current
Deferred￿tax￿liabilities￿-￿non-current
Net deferred tax assets (liabilities)

124,431
139,513
(3,494)
(290,626)
(30,176)

(8,186)
29,496
10,639
3,061
(3,630)
5,821
(33,465)
(6,102)
(1,442)
(1,467)
(9,203)
14,099
(379)

68,719
(9,232)
(64)
4,055
63,478

63,099

1,891
2,623
5,712
1,779
5,520
1,147
5,289
612
364
630
2,417
638
28,622

14,593
43,361
63,012
21,249
47,350
13,670
39,106
6,295
2,283
5,505
9,365
26,398
292,187

(25,955)
(2,611)
-
(264)
(28,830)

(219,141)
(29,435)
(1,887)
(9,009)
(259,472)

(208)

32,715

159,460
28,760
(1,928)
(153,577)
32,715

1
2

Alternative￿minimum￿tax￿credits￿relate￿to￿prepaid￿US￿taxes￿which￿are￿credited￿against￿future￿taxable￿profits￿after￿the￿carry-forward￿losses￿used.
Valuation￿allowances￿recognized￿in￿relation￿to￿deferred￿tax￿assets￿as￿of￿December￿31,￿2014￿amounted￿to￿EUR￿25.4￿million￿(2013:￿EUR￿25.0￿million)

ASML￿ANNUAL￿REPORT￿2014

F-39

Deferred taxes
(in thousands)
Deferred tax assets:
Capitalized￿R&D￿expenditures
Inventories
Deferred￿revenue
Accrued￿and￿other￿liabilities
Installation￿and￿warranty￿reserve
Tax￿effect￿carry-forward￿losses
Property,￿plant￿and￿equipment
Restructuring￿and￿impairment
Alternative￿minimum￿tax￿credits1
Share-based￿payments
Other￿temporary￿differences
Total deferred tax assets2

Deferred tax liabilities:
Intangible￿fixed￿assets
Property,￿plant￿and￿equipment
Borrowing￿costs
Other￿temporary￿differences
Total deferred tax liabilities

Acquisitions
through
business
combinations
EUR

Consolidated
Statements of
Operations
EUR

Effect of
changes in
exchange
rates
EUR

January 1,
2013
EUR

December 31,
2013
EUR

27,403
28,167
20,572
21,528
7,151
5,557
7,798
4,336
5,227
1,433
13,966
143,138

-
(25,890)
(1,958)
(763)
(28,611)

-
10,258
41,679
7,148
-
754
4,140
-
-
9,365
16,701
90,045

(286,337)
(4,786)
-
(303)
(291,426)

5,882
9,269
(43,035)
17,960
(174)
61,551
325
(791)
1,349
5,939
(14,487)
43,788

8,730
12,517
135
(12,086)
9,296

(1,155)
(1,033)
(2,807)
(1,176)
(275)
(580)
(478)
(184)
(234)
(586)
(4,519)
(13,027)

15,702
567
-
352
16,621

32,130
46,661
16,409
45,460
6,702
67,282
11,785
3,361
6,342
16,151
11,661
263,944

(261,905)
(17,592)
(1,823)
(12,800)
(294,120)

Net deferred tax assets (liabilities)

114,527

(201,381)

53,084

3,594

(30,176)

Classified￿as:
Deferred￿tax￿assets￿-￿current
Deferred￿tax￿assets￿-￿non-current
Deferred￿tax￿liabilities￿-￿current
Deferred￿tax￿liabilities￿-￿non-current
Net deferred tax assets (liabilities)

103,695
39,443
(271)
(28,340)
114,527

124,431
139,513
(3,494)
(290,626)
(30,176)

1
2

Alternative￿minimum￿tax￿credits￿relate￿to￿prepaid￿US￿taxes￿which￿are￿credited￿against￿future￿taxable￿profits￿after￿the￿carry-forward￿losses￿used.
Valuation￿allowances￿recognized￿in￿relation￿to￿deferred￿tax￿assets￿as￿of￿December￿31,￿2013￿amounted￿to￿EUR￿25.0￿million￿(2012:￿EUR￿30.5￿million)

Tax Effect Carry-forward Losses
Deferred￿tax￿assets￿from￿carry-forward￿losses￿recognised￿as￿per￿December￿31,￿2014￿result￿predominantly￿from￿net
operating￿loss￿carry-forwards￿incurred￿relating￿to￿NID￿stock￿in￿Belgium￿and￿various￿qualifying￿state￿tax￿losses￿in￿the￿US.

NID￿stock￿in￿Belgium￿can￿generally￿be￿offset￿against￿future￿profits￿realized￿in￿the￿7￿years￿following￿the￿year￿in￿which
the￿NID￿stock￿occurs.￿The￿total￿amount￿of￿NID￿stock￿is￿EUR￿37.5￿million￿(2013:￿47.6￿million)￿taxable￿base￿and￿EUR￿12.7
million￿(2013:￿EUR￿16.2￿million)￿tax￿effect.

Net￿operating￿losses￿qualifying￿as￿tax￿losses￿under￿US￿federal￿tax￿laws￿incurred￿by￿US￿group￿companies￿can￿in￿general
be￿offset￿against￿future￿profits￿realized￿in￿20￿years￿following￿the￿year￿in￿which￿the￿losses￿are￿incurred.￿The￿total￿amount
of￿losses￿carried￿forward￿under￿US￿federal￿tax￿laws￿as￿of￿December￿31,￿2014,￿is￿EUR￿44.6￿million￿(2013:￿EUR￿67.5
million)￿tax￿basis￿or￿EUR￿15.6￿million￿(2013:￿EUR￿23.6￿million)￿tax￿effect.￿The￿total￿amount￿of￿losses￿carried￿forward
under￿US￿state￿tax￿laws￿as￿of￿December￿31,￿2014,￿is￿EUR￿77.7￿million￿(2013:￿EUR￿254.3￿million)￿tax￿basis￿or￿EUR￿3.7
million￿(2013:￿EUR￿7.9￿million)￿tax￿effect.￿Our￿ability￿to￿use￿US￿state￿tax￿loss￿carry￿forwards￿in￿existence￿at￿December
31,￿2014,￿is￿subject￿to￿varying￿state￿statutes￿(providing￿for￿periods￿of￿between￿5￿and￿20￿years).

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21. Segment Disclosure
ASML￿has￿one￿reportable￿segment,￿for￿the￿development,￿production,￿marketing,￿sale￿and￿servicing￿of￿advanced
semiconductor￿equipment￿systems￿exclusively￿consisting￿of￿lithography￿related￿systems.￿Its￿operating￿results￿are
regularly￿reviewed￿by￿the￿CODM￿in￿order￿to￿make￿decisions￿about￿resource￿allocation￿and￿assess￿performance.

Management￿reporting￿includes￿net￿system￿sales￿figures￿of￿new￿and￿used￿systems￿and￿includes￿sales￿by￿technology.

Net￿system￿sales￿for￿new￿and￿used￿systems￿were￿as￿follows:

Year ended December 31
(in thousands)

2014
EUR

2013
EUR

2012
EUR

New￿systems
Used￿systems

4,127,433
115,357

3,890,154
102,975

3,620,260
181,372

Net system sales

4,242,790

3,993,129

3,801,632

Net￿system￿sales￿per￿technology￿were￿as￿follows:

Year ended December 31
(in thousands)
2014
EUV
ArFi
ArF￿dry
KrF
I-line
Total

2013
EUV
ArFi
ArF￿dry
KrF
I-line
Total

2012
EUV
ArFi
ArF￿dry
KrF
I-line
Total

Net system sales
in units

Net system sales
in EUR

5
76
3
38
14
136

1
77
2
64
13
157

1
72
4
78
15
170

299,845
3,477,718
32,611
381,436
51,180
4,242,790

60,100
3,120,719
38,019
720,053
54,238
3,993,129

43,700
2,715,221
81,428
908,244
53,039
3,801,632

The￿increase￿in￿net￿system￿sales￿of￿EUR￿249.7￿million,￿or￿6.3￿percent,￿to￿EUR￿4,242.8￿million￿in￿2014￿from￿EUR￿3,993.1
million￿in￿2013￿(2012:￿EUR￿3,801.6￿million)￿was￿mainly￿caused￿by￿higher￿NXE:3300B￿system￿sales.

For￿geographical￿reporting,￿net￿sales￿are￿attributed￿to￿the￿geographic￿location￿in￿which￿the￿customers’￿facilities￿are
located.￿Long-lived￿assets￿are￿attributed￿to￿the￿geographic￿location￿in￿which￿these￿assets￿are￿located.

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Net￿sales￿and￿long-lived￿assets￿(consisting￿of￿property,￿plant￿and￿equipment)￿by￿geographic￿region￿were￿as￿follows:

Year ended December 31
(in thousands)
2014
Japan
Korea
Singapore
Taiwan
Rest￿of￿Asia
Netherlands
Rest￿of￿Europe
United￿States
Total

2013
Japan
Korea
Singapore
Taiwan
Rest￿of￿Asia
Netherlands
Rest￿of￿Europe
United￿States
Total

2012
Japan
Korea
Singapore
Taiwan
Rest￿of￿Asia
Netherlands
Rest￿of￿Europe
United￿States
Total

Net sales
EUR

477,110
1,624,059
132,593
1,124,883
405,576
1,334
196,332
1,894,390
5,856,277

201,664
1,286,509
139,313
2,221,426
478,234
11,525
187,030
719,625
5,245,326

292,309
1,276,304
98,554
1,479,768
197,262
-
256,192
1,131,166
4,731,555

Long-lived
assets
EUR

3,695
16,684
879
60,241
3,807
1,124,632
1,322
236,263
1,447,523

3,340
16,155
1,109
48,427
3,742
969,192
2,600
173,275
1,217,840

19,585
17,664
968
50,372
2,073
869,736
1,571
67,954
1,029,923

In￿2014,￿net￿sales￿to￿the￿largest￿customer￿accounted￿for￿EUR￿1,532.1￿million,￿or￿26.2￿percent,￿of￿net￿sales￿(2013:￿EUR
2,058.6￿million,￿or￿39.2￿percent,￿of￿net￿sales;￿2012:￿EUR￿1,236.1￿million,￿or￿26.1￿percent,￿of￿net￿sales).￿Our￿three￿largest
customers￿(based￿on￿net￿sales)￿accounted￿for￿EUR￿643.2￿million,￿or￿49.3￿percent,￿of￿accounts￿receivable￿and￿finance
receivables￿at￿December￿31,￿2014,￿compared￿with￿EUR￿861.4￿million,￿or￿73.3￿percent,￿at￿December￿31,￿2013.

Substantially￿all￿of￿our￿sales￿were￿export￿sales￿in￿2014,￿2013￿and￿2012.

22. Selected Operating Expenses and Additional Information
Personnel￿expenses￿for￿all￿payroll￿employees￿were:

Year ended December 31
(in thousands)
Wages￿and￿salaries
Social￿security￿expenses
Pension￿and￿retirement￿expenses
Share-based￿payments
Personnel expenses

2014
EUR
985,883
81,721
71,316
63,380
1,202,300

2013
EUR
835,563
69,839
60,275
52,371
1,018,048

2012
EUR
711,039
58,180
50,298
18,714
838,231

The￿average￿number￿of￿payroll￿employees￿in￿FTEs￿during￿2014,￿2013￿and￿2012￿was￿10,942,￿9,540￿and￿8,140,
respectively.

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The￿total￿number￿of￿payroll￿and￿temporary￿employees￿in￿FTEs￿per￿sector￿was:

As of December 31
Customer￿Support
SG&A
Industrial￿Engineering 1
Manufacturing￿&￿Logistics
R&D
Total employees (in FTEs)
Less:￿Temporary￿employees￿(in￿FTEs)
Payroll employees (in FTEs)

2014
3,289
1,240
-
3,846
5,697
14,072
2,754
11,318

2013
2,949
1,098
785
3,658
4,735
13,225
2,865
10,360

2012
2,538
869
637
2,856
3,736
10,636
2,139
8,497

1

As￿of￿January￿1,￿2014,￿our￿industrial￿engineering￿department￿has￿been￿incorporated￿into￿R&D

The￿average￿number￿of￿payroll￿employees￿in￿FTEs￿in￿our￿operations￿in￿the￿Netherlands￿during￿2014,￿2013￿and￿2012￿was
5,589,￿5,112￿and￿4,620,￿respectively.￿The￿increase￿in￿2014￿compared￿to￿2013￿in￿payroll￿employees￿in￿FTEs￿is￿in￿line￿with
our￿net￿sales￿growth.

23. Research and Development Costs
R&D￿costs￿(net￿of￿credits￿and￿excluding￿contributions￿under￿the￿NRE￿Funding￿Agreements￿from￿certain￿Participating
Customers￿in￿the￿CCIP)￿increased￿by￿EUR￿192.1￿million,￿or￿21.8￿percent,￿to￿EUR￿1,074.1￿million￿in￿2014￿from￿EUR￿882.0
million￿in￿2013.￿R&D￿costs￿increased￿mainly￿due￿to￿the￿acceleration￿of￿certain￿R&D￿programs,￿primarily￿EUV￿and￿next-
generation￿immersion.

R&D￿costs￿(net￿of￿credits￿and￿excluding￿contributions￿under￿the￿NRE￿funding￿agreements￿from￿Participating￿Customers
in￿the￿CCIP)￿increased￿by￿EUR￿292.9￿million,￿or￿49.7￿percent,￿to￿EUR￿882.0￿million￿in￿2013￿from￿EUR￿589.1￿million￿in
2012.￿R&D￿spending￿mainly￿increased￿due￿the￿additional￿investments￿in￿EUV￿source￿development￿as￿a￿result￿of￿the
acquisition￿of￿Cymer￿and￿further￿investments￿in￿our￿other￿strategic￿programs￿(Immersion￿and￿holistic￿lithography).

R&D￿costs￿include￿credits￿of￿EUR￿24.1￿million,￿EUR￿16.0￿million￿and￿EUR￿17.9￿million￿in￿2014,￿2013￿and￿2012
respectively.￿R&D￿credits￿relate￿to￿worldwide￿(inter-)governmental￿funding￿for￿certain￿strategic￿development￿programs
designed￿to￿stimulate￿high-risk￿research￿for￿the￿medium￿and￿long￿term￿future.￿The￿increase￿relates￿to￿entering￿into￿a
number￿of￿strategic￿development￿programs￿providing￿funding￿for￿the￿next￿generation￿immersion￿and￿EUV￿lithography
systems￿during￿2014.

24. Interest and Other, Net
Interest￿and￿other￿income￿of￿EUR￿14.5￿million￿(2013:￿EUR￿9.2￿million￿and￿2012:￿EUR￿16.6￿million)￿mainly￿relates￿to
interest￿income￿on￿deposits,￿short-term￿investments,￿money￿market￿funds,￿bank￿accounts￿and￿on￿finance￿receivables.

Interest￿and￿other￿expense￿of￿EUR￿23.1￿million￿(2013:￿EUR￿33.6￿million￿and￿2012:￿EUR￿22.8￿million)￿mainly￿consists
of￿net￿interest￿expense￿on￿our￿Eurobonds￿and￿related￿interest￿rate￿swaps,￿interest￿on￿lease￿obligations￿and￿amortized
financing￿costs￿of￿a￿total￿of￿EUR￿19.9￿million￿(2013:￿EUR￿16.2￿million￿and￿2012:￿EUR￿10.8￿million).￿In￿2013,￿there￿was￿a
one-off￿loss￿of￿EUR￿8.9￿million￿relating￿the￿partial￿extinguishment￿of￿our￿EUR￿600￿million￿5.75￿percent￿senior￿notes￿due
2017.￿

Interest￿on￿cash￿pools￿is￿reported￿on￿a￿gross￿basis￿in￿the￿Consolidated￿Statements￿of￿Operations￿under￿both
interest￿income￿and￿interest￿expense.￿From￿an￿economic￿and￿legal￿perspective,￿the￿interest￿on￿cash￿pools￿of
EUR￿3.2￿million￿(2013:￿EUR￿1.9￿million￿and￿2012:￿EUR￿4.2￿million)￿recorded￿in￿interest￿income￿nets￿off￿against￿the￿same
amount￿recorded￿in￿interest￿expense.

25. Vulnerability Due to Certain Concentrations
We￿rely￿on￿outside￿vendors￿for￿components￿and￿subassemblies￿used￿in￿our￿systems￿including￿the￿design￿thereof,￿each
of￿which￿is￿obtained￿from￿a￿single￿supplier￿or￿a￿limited￿number￿of￿suppliers.￿Our￿reliance￿on￿a￿limited￿group￿of￿suppliers
involves￿several￿risks,￿including￿a￿potential￿inability￿to￿obtain￿an￿adequate￿supply￿of￿required￿components,￿reduced
control￿over￿pricing￿and￿the￿risk￿of￿untimely￿delivery￿of￿these￿components￿and￿subassemblies.

The￿number￿of￿lithography￿systems￿we￿are￿able￿to￿produce￿may￿be￿limited￿by￿the￿production￿capacity￿of￿Zeiss.￿Zeiss￿is
our￿single￿supplier￿of￿lenses,￿mirrors,￿collectors￿and￿other￿critical￿optical￿components￿(which￿we￿refer￿to￿as￿optics)￿and
is￿capable￿of￿producing￿these￿items￿only￿in￿limited￿numbers￿and￿only￿through￿the￿use￿of￿its￿manufacturing￿and￿testing
facility￿in￿Oberkochen￿and￿Wetzlar,￿Germany.￿During￿2014,￿our￿production￿was￿not￿limited￿by￿the￿deliveries￿from￿Zeiss.

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26. Shareholders' Equity

Share Capital
ASML's￿authorized￿share￿capital￿amounts￿to￿EUR￿126,000,000￿and￿is￿divided￿into:
• 700,000,000￿Cumulative￿Preference￿Shares￿with￿a￿nominal￿value￿of￿EUR￿0.09￿each;
• 699,999,000￿Ordinary￿Shares￿with￿a￿nominal￿value￿of￿EUR￿0.09￿each;￿and
• 9,000￿Ordinary￿Shares￿B￿with￿a￿nominal￿value￿of￿EUR￿0.01￿each.

As￿at￿December￿31,￿2014,￿438,073,643￿ordinary￿shares￿with￿a￿nominal￿value￿of￿EUR￿0.09￿each￿were￿issued￿and
fully￿paid￿up,￿of￿which￿5,138,355￿ordinary￿shares￿are￿held￿by￿us￿in￿treasury.￿No￿ordinary￿shares￿B￿and￿no￿cumulative
preference￿shares￿are￿issued.

Our￿BoM￿has￿the￿power￿to￿issue￿ordinary￿shares￿and￿cumulative￿preference￿shares￿insofar￿as￿the￿BoM￿has￿been
authorized￿to￿do￿so￿by￿the￿General￿Meeting￿of￿Shareholders￿(either￿by￿means￿of￿a￿resolution￿or￿by￿an￿amendment￿to￿our
Articles￿of￿Association).￿The￿BoM￿requires￿approval￿of￿the￿Supervisory￿Board￿for￿such￿an￿issue.￿The￿authorization￿by￿the
General￿Meeting￿of￿Shareholders￿can￿only￿be￿granted￿for￿a￿certain￿period￿not￿exceeding￿five￿years￿and￿may￿be￿extended
for￿no￿longer￿than￿five￿years￿on￿each￿occasion.￿In￿case￿the￿General￿Meeting￿of￿Shareholders￿has￿not￿authorized￿the￿BoM
to￿issue￿shares,￿the￿General￿Meeting￿of￿Shareholders￿shall￿have￿the￿power￿to￿issue￿shares￿upon￿the￿proposal￿of￿the
BoM,￿provided￿that￿the￿Supervisory￿Board￿has￿approved￿such￿proposal.

Shares Issued as a Result of the Acquisition of Cymer
A￿subsidiary￿of￿ASML￿and￿Cymer￿completed￿a￿merger￿pursuant￿to￿which￿ASML￿acquired￿Cymer￿on￿May￿30,￿2013.￿As￿a
result￿of￿the￿merger,￿each￿share￿of￿Cymer￿common￿stock￿outstanding￿immediately￿prior￿to￿the￿completion￿of￿the￿merger
was￿converted￿into￿the￿right￿to￿receive￿USD￿20.00￿in￿cash￿plus￿1.1502￿ASML￿ordinary￿shares.￿As￿of￿December￿31,￿2014,
we￿have￿issued￿36,468,733￿ordinary￿shares￿for￿an￿aggregate￿amount￿of￿EUR￿2,347.0￿million￿in￿relation￿to￿the￿acquisition
of￿Cymer.

Shares Issued in Relation to Share-based Compensation
We￿have￿adopted￿various￿share￿and￿option￿plans￿for￿our￿employees.￿Whenever￿ordinary￿shares￿have￿to￿be￿delivered
pursuant￿to￿these￿plans,￿we￿typically￿deliver￿treasury￿shares￿that￿we￿purchase￿in￿share￿buy-back￿programs￿for￿this
purpose.￿Because￿these￿treasury￿shares￿were￿no￿longer￿available￿in￿the￿course￿of￿2014,￿we￿issued￿new￿ordinary￿shares
from￿time￿to￿time￿to￿meet￿our￿delivery￿obligations￿under￿the￿plans.￿As￿of￿December￿31,￿2014,￿we￿issued￿707,195
ordinary￿shares￿with￿an￿aggregate￿fair￿value￿of￿EUR￿51.3￿million￿(2013:￿EUR￿nil￿million;￿2012:￿EUR￿nil￿million)￿in￿relation
to￿our￿share￿(option)￿plans￿for￿our￿employees.￿Fair￿value￿is￿determined￿on￿the￿closing￿price￿of￿our￿ordinary￿shares￿at
Amsterdam￿Euronext￿at￿the￿date￿of￿respective￿issuance.

Synthetic Share Buyback
At￿the￿EGM￿held￿on￿September￿7,￿2012,￿several￿changes￿in￿the￿Articles￿of￿Association￿of￿ASML￿were￿adopted,￿in
connection￿with￿the￿synthetic￿share￿buyback￿effectuated￿in￿connection￿with￿the￿CCIP.

Consequently,￿on￿November￿24,￿2012,￿the￿Articles￿of￿Association￿were￿amended￿as￿follows.￿Upon￿the￿first￿amendment,
the￿ordinary￿shares￿to￿be￿held￿for￿the￿benefit￿of￿the￿participants￿to￿the￿CCIP￿were￿converted￿into￿ordinary￿shares￿M
and￿all￿other￿ordinary￿shares￿were￿converted￿into￿ordinary￿shares￿A.￿Upon￿the￿second￿amendment,￿the￿par￿value￿per
ordinary￿share￿A￿was￿increased￿from￿EUR￿0.09￿to￿EUR￿9.24￿at￿the￿expense￿of￿the￿share￿premium￿reserve.￿Upon￿the
third￿amendment,￿the￿nominal￿value￿per￿ordinary￿share￿A￿was￿reduced￿to￿an￿amount￿of￿EUR￿0.06,￿by￿decreasing￿the
nominal￿value￿per￿ordinary￿share￿A￿by￿an￿amount￿of￿EUR￿9.18,￿which￿resulted￿in￿a￿repayment￿of￿the￿same￿amount￿per
share￿to￿holders￿of￿ordinary￿shares￿into￿which￿the￿ordinary￿shares￿A￿were￿converted.￿The￿fourth￿amendment￿provided
for￿the￿consolidation￿of￿the￿ordinary￿shares￿A￿through￿the￿exchange￿of￿each￿100￿ordinary￿shares￿for￿77￿ordinary￿shares,
resulting￿in￿an￿increase￿of￿the￿nominal￿value￿per￿ordinary￿share￿from￿EUR￿0.06￿to￿EUR￿0.09,￿whereby￿the￿aggregate
difference￿was￿booked￿at￿the￿expense￿of￿the￿share￿premium￿reserve.￿The￿fifth￿and￿last￿amendment￿provided￿for￿the
deletion￿of￿the￿share￿class￿M￿for￿participants￿to￿the￿CCIP￿and￿the￿share￿class￿A￿for￿the￿other￿shareholders.￿The￿ordinary
shares￿M￿and￿A￿were￿converted￿thereafter￿into￿ordinary￿shares￿without￿a￿specific￿letter￿mark￿attached￿to￿it.

These￿amendments￿in￿substance￿constitute￿a￿synthetic￿share￿buyback￿in￿which￿we￿effectively￿repurchased￿93,411,216
shares￿at￿an￿average￿price￿of￿EUR￿39.91￿for￿a￿total￿amount￿of￿EUR￿3,728.3￿million.￿The￿difference￿of￿EUR￿125.6￿million
between￿the￿capital￿repayment￿of￿EUR￿3,728.3￿million￿and￿the￿net￿proceeds￿from￿issuance￿of￿shares￿of￿EUR￿3,853.9
million￿relates￿to￿the￿capital￿repayment￿on￿ASML's￿treasury￿shares￿which￿were￿part￿of￿the￿synthetic￿share￿buyback.

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Shares Issued in Customer Co-Investment Program
In￿connection￿with￿the￿CCIP,￿on￿September￿12,￿2012,￿we￿issued￿62,977,877￿ordinary￿shares￿to￿the￿Stichting￿that￿holds
shares￿on￿behalf￿of￿Intel￿and￿12,595,575￿ordinary￿shares￿to￿the￿Stichting￿that￿holds￿shares￿on￿behalf￿of￿Samsung￿and
on￿October￿31,￿2012,￿ASML￿issued￿20,992,625￿ordinary￿shares￿to￿the￿Stichting￿that￿holds￿shares￿on￿behalf￿of￿TSMC.
We￿received￿an￿amount￿of￿EUR￿3,853.9￿million￿in￿relation￿to￿the￿shares￿issued￿under￿the￿CCIP.￿For￿further￿details￿on￿our
CCIP￿see￿Note￿28.

Ordinary Shares
Each￿ordinary￿share￿consists￿of￿900￿fractional￿shares.￿Fractional￿shares￿entitle￿the￿holder￿thereof￿to￿a￿fractional￿dividend
but￿do￿not￿entitle￿the￿holder￿thereof￿to￿voting￿rights.￿Only￿those￿persons￿who￿hold￿shares￿directly￿in￿the￿share￿register
in￿the￿Netherlands,￿held￿by￿us￿at￿our￿address￿at￿5504￿DR￿Veldhoven,￿de￿Run￿6501,￿the￿Netherlands,￿or￿in￿the￿New
York￿share￿register,￿held￿by￿JP￿Morgan￿Chase￿Bank,￿N.A.,￿P.O.￿Box￿64506,￿St.￿Paul,￿MN￿55164-0506,￿United￿States,
can￿hold￿fractional￿shares.￿Persons￿who￿hold￿ordinary￿shares￿through￿the￿deposit￿system￿under￿the￿Dutch￿Securities
Bank￿Giro￿Transactions￿Act￿(Wet giraal effectenverkeer;￿the￿"Giro￿Act")￿maintained￿by￿the￿Dutch￿central￿securities
depository￿Euroclear￿Nederland￿or￿through￿the￿DTC￿cannot￿hold￿fractional￿shares.￿An￿ordinary￿share￿entitles￿the￿holder
thereof￿to￿cast￿nine￿votes￿in￿the￿General￿Meeting￿of￿Shareholders.￿At￿our￿2014￿AGM,￿the￿BoM￿was￿authorized￿from￿April
23,￿2014￿through￿October￿23,￿2015,￿subject￿to￿the￿approval￿of￿the￿Supervisory￿Board,￿to￿issue￿shares￿and/or￿rights
thereto￿representing￿up￿to￿a￿maximum￿of￿5.0￿percent￿of￿our￿issued￿share￿capital￿at￿April￿23,￿2014,￿plus￿an￿additional￿5.0
percent￿of￿our￿issued￿share￿capital￿at￿April￿23,￿2014￿that￿may￿be￿issued￿in￿connection￿with￿mergers,￿acquisitions￿and/or
(strategic)￿alliances.

Holders￿of￿ASML’s￿ordinary￿shares￿have￿a￿preemptive￿right￿of￿subscription,￿in￿proportion￿to￿the￿aggregate￿nominal
amount￿of￿the￿ordinary￿shares￿held￿by￿them,￿to￿any￿issuance￿of￿ordinary￿shares￿for￿cash,￿which￿right￿may￿be￿restricted
or￿excluded.￿Holders￿of￿ordinary￿shares￿have￿no￿pro￿rata￿preemptive￿right￿of￿subscription￿to￿any￿ordinary￿shares￿issued
for￿consideration￿other￿than￿cash￿or￿ordinary￿shares￿issued￿to￿employees.￿If￿authorized￿for￿this￿purpose￿by￿the￿General
Meeting￿of￿Shareholders￿(either￿by￿means￿of￿a￿resolution￿or￿by￿an￿amendment￿to￿our￿Articles￿of￿Association),￿the￿BoM
has￿the￿power￿subject￿to￿approval￿of￿the￿Supervisory￿Board,￿to￿restrict￿or￿exclude￿the￿preemptive￿rights￿of￿holders￿of
ordinary￿shares.￿At￿our￿2014￿AGM,￿our￿shareholders￿authorized￿the￿BoM￿through￿October￿23,￿2015,￿subject￿to￿approval
of￿the￿Supervisory￿Board,￿to￿restrict￿or￿exclude￿preemptive￿rights￿of￿holders￿of￿ordinary￿shares￿up￿to￿a￿maximum￿of￿10
percent￿of￿our￿issued￿share￿capital.￿At￿our￿2015￿AGM,￿our￿shareholders￿will￿be￿asked￿to￿extend￿this￿authority￿through
October￿22,￿2016.

Ordinary Shares B
In￿2012,￿the￿9,000￿ordinary￿shares￿B￿with￿a￿nominal￿value￿of￿EUR￿0.01￿were￿introduced.￿Every￿holder￿of￿an￿ordinary
share￿B￿is￿entitled￿to￿one-ninth￿(1/9)￿of￿a￿dividend.￿Each￿ordinary￿share￿B￿entitles￿the￿holder￿thereof￿to￿cast￿one￿vote￿at
the￿General￿Meeting￿of￿Shareholders.

Cumulative Preference Shares
In￿1998,￿we￿granted￿the￿Preference￿Share￿Option￿to￿the￿Foundation.￿This￿option￿was￿amended￿and￿extended￿in￿2003
and￿2007.￿A￿third￿amendment￿to￿the￿option￿agreement￿between￿the￿Foundation￿and￿ASML￿became￿effective￿on￿January
1,￿2009,￿to￿clarify￿the￿procedure￿for￿the￿repurchase￿and￿cancellation￿of￿the￿preference￿shares￿when￿issued.

The￿nominal￿value￿of￿the￿cumulative￿preference￿shares￿amounts￿to￿EUR￿0.09￿and￿the￿number￿of￿cumulative￿preference
shares￿included￿in￿the￿authorized￿share￿capital￿is￿700,000,000.￿A￿cumulative￿preference￿share￿entitles￿the￿holder￿thereof
to￿cast￿nine￿votes￿in￿the￿General￿Meeting￿of￿Shareholders.

The￿Foundation￿may￿exercise￿the￿Preference￿Share￿Option￿in￿situations￿where,￿in￿the￿opinion￿of￿the￿Board￿of￿Directors
of￿the￿Foundation,￿ASML's￿interests,￿ASML's￿business￿or￿the￿interests￿of￿ASML's￿stakeholders￿are￿at￿stake.￿This￿may
be￿the￿case￿if￿a￿public￿bid￿for￿ASML's￿shares￿has￿been￿announced￿or￿has￿been￿made,￿or￿the￿justified￿expectation￿exists
that￿such￿a￿bid￿will￿be￿made￿without￿any￿agreement￿having￿been￿reached￿in￿relation￿to￿such￿a￿bid￿with￿ASML.￿The￿same
may￿apply￿if￿one￿shareholder,￿or￿more￿shareholders￿acting￿in￿concert,￿hold￿a￿substantial￿percentage￿of￿ASML's￿issued
ordinary￿shares￿without￿making￿an￿offer￿or￿if,￿in￿the￿opinion￿of￿the￿Board￿of￿Directors￿of￿the￿Foundation,￿the￿(attempted)
exercise￿of￿the￿voting￿rights￿by￿one￿shareholder￿or￿more￿shareholders,￿acting￿in￿concert,￿is￿materially￿in￿conflict￿with
ASML's￿interests,￿ASML's￿business￿or￿ASML's￿stakeholders.

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The￿objectives￿of￿the￿Foundation￿are￿to￿look￿after￿the￿interests￿of￿ASML￿and￿of￿the￿enterprises￿maintained￿by￿ASML
and￿of￿the￿companies￿which￿are￿affiliated￿in￿a￿group￿with￿ASML,￿in￿such￿a￿way￿that￿the￿interests￿of￿ASML,￿of￿those
enterprises￿and￿of￿all￿parties￿concerned￿are￿safeguarded￿in￿the￿best￿possible￿way,￿and￿influences￿in￿conflict￿with￿these
interests￿which￿might￿affect￿the￿independence￿or￿the￿identity￿of￿ASML￿and￿those￿companies￿are￿deterred￿to￿the￿best
of￿the￿Foundation’s￿ability,￿and￿everything￿related￿to￿the￿above￿or￿possibly￿conducive￿thereto.￿The￿Foundation￿seeks￿to
realize￿its￿objects￿by￿the￿acquiring￿and￿holding￿of￿cumulative￿preference￿shares￿in￿the￿capital￿of￿ASML￿and￿by￿exercising
the￿rights￿attached￿to￿these￿shares,￿particularly￿the￿voting￿rights￿attached￿to￿these￿shares.

The￿Preference￿Share￿Option￿gives￿the￿Foundation￿the￿right￿to￿acquire￿a￿number￿of￿cumulative￿preference￿shares￿as
the￿Foundation￿will￿require,￿provided￿that￿the￿aggregate￿nominal￿value￿of￿such￿number￿of￿cumulative￿preference￿shares
shall￿not￿exceed￿the￿aggregate￿nominal￿value￿of￿the￿ordinary￿shares￿that￿have￿been￿issued￿at￿the￿time￿of￿exercise￿of￿the
Preference￿Share￿Option￿for￿a￿subscription￿price￿equal￿to￿their￿nominal￿value.￿Only￿one-fourth￿of￿the￿subscription￿price
is￿payable￿at￿the￿time￿of￿initial￿issuance￿of￿the￿cumulative￿preference￿shares,￿with￿the￿other￿three-fourths￿of￿the￿nominal
value￿only￿being￿payable￿when￿we￿call￿up￿this￿amount.￿Exercise￿of￿the￿preference￿share￿option￿could￿effectively￿dilute
the￿voting￿power￿of￿the￿outstanding￿ordinary￿shares￿by￿one-half.

Cancellation￿and￿repayment￿of￿the￿issued￿cumulative￿preference￿shares￿by￿ASML￿requires￿the￿authorization￿by
the￿General￿Meeting￿of￿Shareholders￿of￿a￿proposal￿to￿do￿so￿by￿the￿BoM￿approved￿by￿the￿Supervisory￿Board.￿If￿the
Preference￿Share￿Option￿is￿exercised￿and￿as￿a￿result￿cumulative￿preference￿shares￿are￿issued,￿ASML,￿at￿the￿request￿of
the￿Foundation,￿will￿initiate￿the￿repurchase￿or￿cancellation￿of￿all￿cumulative￿preference￿shares￿held￿by￿the￿Foundation.
In￿that￿case￿ASML￿is￿obliged￿to￿effect￿the￿repurchase￿and￿cancellation￿respectively￿as￿soon￿as￿possible.￿A￿cancellation
will￿have￿as￿a￿result￿a￿repayment￿of￿the￿amount￿paid￿and￿exemption￿from￿the￿obligation￿to￿pay￿up￿on￿the￿cumulative
preference￿shares.￿A￿repurchase￿of￿the￿cumulative￿preference￿shares￿can￿only￿take￿place￿when￿such￿shares￿are￿fully
paid￿up.

If￿the￿Foundation￿does￿not￿request￿ASML￿to￿repurchase￿or￿cancel￿all￿cumulative￿preference￿shares￿held￿by￿the
Foundation￿within￿20￿months￿after￿issuance￿of￿these￿shares,￿we￿will￿be￿obliged￿to￿convene￿a￿General￿Meeting￿of
Shareholders￿in￿order￿to￿decide￿on￿a￿repurchase￿or￿cancellation￿of￿these￿shares.

The￿Foundation￿is￿independent￿of￿ASML.￿The￿Board￿of￿Directors￿of￿the￿Foundation￿comprises￿four￿independent
members￿from￿the￿Dutch￿business￿and￿academic￿communities.￿The￿members￿of￿the￿Board￿of￿Directors￿of￿the
Foundation￿are:￿Mr.￿H.￿Bodt,￿Mr.￿M.W.￿den￿Boogert,￿Mr.￿J.M.￿de￿Jong￿and￿Mr.￿A.H.￿Lundqvist.

Dividend Policy
As￿part￿of￿our￿financing￿policy,￿we￿aim￿to￿pay￿an￿annual￿dividend￿that￿will￿be￿stable￿or￿growing￿over￿time.￿Annually,￿the
BoM￿will,￿upon￿prior￿approval￿from￿the￿Supervisory￿Board,￿submit￿a￿proposal￿to￿the￿AGM￿with￿respect￿to￿the￿amount
of￿dividend￿to￿be￿declared￿with￿respect￿to￿the￿prior￿year.￿The￿dividend￿proposal￿in￿any￿given￿year￿will￿be￿subject￿to￿the
availability￿of￿distributable￿profits￿or￿retained￿earnings￿and￿may￿be￿affected￿by,￿among￿other￿factors,￿the￿BoM's￿views
on￿our￿potential￿future￿liquidity￿requirements,￿including￿for￿investments￿in￿production￿capacity,￿the￿funding￿of￿our￿R&D
programs￿and￿for￿acquisition￿opportunities￿that￿may￿arise￿from￿time￿to￿time;￿and￿by￿future￿changes￿in￿applicable￿income
tax￿and￿corporate￿laws.￿Accordingly,￿it￿may￿be￿decided￿to￿propose￿not￿to￿pay￿a￿dividend￿or￿to￿pay￿a￿lower￿dividend￿with
respect￿to￿any￿particular￿year￿in￿the￿future.

For￿2014,￿a￿proposal￿to￿declare￿a￿dividend￿of￿EUR￿0.70￿per￿ordinary￿share￿of￿EUR￿0.09￿nominal￿value￿will￿be￿submitted
to￿the￿2015￿AGM.

27. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
In￿addition￿to￿dividend￿payments,￿we￿intend￿to￿return￿cash￿to￿our￿shareholders￿on￿a￿regular￿basis￿through￿share
buybacks￿or￿capital￿repayment,￿subject￿to￿our￿actual￿and￿anticipated￿level￿of￿liquidity￿requirements,￿our￿current￿share
price,￿other￿market￿conditions￿and￿other￿relevant￿factors.

On￿April￿17,￿2013￿we￿announced￿our￿intention￿to￿repurchase￿up￿to￿EUR￿1.0￿billion￿of￿our￿own￿shares￿within￿the
2013-2014￿timeframe.￿During￿the￿period￿from￿January￿20,￿2014￿up￿to￿and￿including￿December￿22,￿2014,￿when￿the
program￿was￿completed,￿we￿had￿purchased￿9,981,375￿shares￿at￿an￿average￿price￿of￿EUR￿70.13￿per￿share.￿Furthermore
9,464,503￿shares￿have￿been￿cancelled￿in￿2014￿and￿the￿remainder￿(5,131,051)￿is￿intended￿to￿be￿cancelled￿in￿2015.

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The￿following￿table￿provides￿a￿summary￿of￿shares￿repurchased￿by￿ASML￿in￿2014:

Period
January￿20￿-￿31,￿2014
February￿1￿-￿28,￿2014
March￿1￿-￿31,￿2014
April￿1￿-￿30,￿2014
May￿2￿-￿31,￿2014
June￿1￿-￿30,￿2014
July￿1￿-￿31,￿2014
August￿1￿-￿31,￿2014
September￿1￿-￿30,￿2014
October￿1￿-￿31,￿2014
November￿1￿-￿30,￿2014
December￿1￿-￿22,￿2014
Total

Total number
of shares
purchased
547,500
962,536
765,284
739,855
783,500
1,061,649
1,048,739
602,125
736,294
1,004,378
883,971
845,544
9,981,375

Average price paid
per Share
(EUR)
64.44
63.92
65.55
63.23
59.98
66.52
66.71
70.14
76.62
74.58
81.85
86.06
70.13

Total number of shares
purchased as
part of publicly
announced plans
or programs
547,500
1,510,036
2,275,320
3,015,175
3,798,675
4,860,324
5,909,063
6,511,188
7,247,482
8,251,860
9,135,831
9,981,375

Maximum value of
shares that may yet be
purchased under the
program
(EUR)
664,718,936
603,190,359
553,029,170
506,251,123
459,253,716
388,627,554
318,664,411
276,431,931
220,019,568
145,116,399
72,765,162
-

28. Customer Co-Investment Program

Overview
On￿July￿9,￿2012,￿we￿announced￿our￿CCIP￿to￿accelerate￿our￿development￿of￿EUV￿technology￿and￿our￿development￿of
future￿450mm￿silicon￿wafer￿technology.￿The￿Participating￿Customers￿collectively￿agreed￿to￿fund￿EUR￿1.38￿billion￿of￿our
R&D￿projects￿from￿2013￿through￿2017.￿This￿program￿created￿risk￿sharing￿with￿some￿of￿our￿largest￿customers￿while￿the
results￿of￿our￿development￿programs￿will￿be￿available￿to￿every￿semiconductor￿manufacturer￿with￿no￿restrictions.

Development 450mm silicon wafer technology
As￿previously￿disclosed,￿in￿November￿2013,￿ASML￿decided￿to￿pause￿the￿development￿of￿450mm￿lithography￿systems
until￿customer￿demand￿and￿the￿timing￿related￿to￿such￿demand￿is￿clear.￿We￿have￿agreed￿with￿Intel￿that￿the￿450mm￿NRE
funding￿will￿be￿applied￿to￿other￿lithography￿projects,￿including￿generic￿developments￿applicable￿to￿both￿300mm￿and
450mm.￿We￿believe￿that￿our￿450mm￿development￿activities￿can￿be￿restarted￿if￿and￿when￿the￿industry￿demands￿the
introduction￿of￿450mm.

In￿addition￿to￿the￿funding￿commitments￿described￿above,￿the￿Participating￿Customers￿have￿invested￿in￿ordinary￿shares
equal,￿in￿aggregate,￿to￿23￿percent￿of￿ASML's￿issued￿share￿capital￿(calculated￿giving￿effect￿to￿our￿synthetic￿share
buyback￿in￿November￿2012).￿The￿proceeds￿of￿the￿share￿issuance,￿EUR￿3.85￿billion,￿were￿returned￿to￿the￿holders￿of
ordinary￿shares￿(excluding￿the￿Participating￿Customers)￿through￿a￿synthetic￿share￿buyback￿executed￿in￿November￿2012.￿

For￿further￿information￿regarding￿the￿synthetic￿share￿buyback,￿see￿Note￿26.

Description of Investment Agreements, Shareholder Agreements and NRE Funding Agreements
In￿connection￿with￿the￿CCIP,￿ASML￿entered￿into￿an￿investment￿agreement,￿a￿shareholder￿agreement￿and￿NRE￿funding
agreements￿with￿each￿of￿the￿Participating￿Customers.￿Intel￿is￿the￿largest￿participant￿in￿the￿program,￿with￿an￿aggregate
funding￿commitment￿of￿EUR￿829￿million￿and￿an￿investment￿in￿15￿percent￿of￿our￿ordinary￿shares￿(calculated￿giving￿effect
to￿our￿synthetic￿share￿buyback￿in￿November￿2012).￿A￿description￿of￿the￿investment￿agreement,￿shareholders￿agreement
and￿NRE￿funding￿agreements￿between￿ASML￿and￿Intel￿is￿set￿out￿below.￿The￿agreements￿between￿ASML￿and￿the￿other
participants￿-￿TSMC￿(which￿acquired￿5￿percent￿of￿our￿shares￿and￿made￿an￿EUR￿276￿million￿funding￿commitment)
and￿Samsung￿(which￿acquired￿3￿percent￿of￿our￿shares￿and￿made￿an￿EUR￿276￿million￿funding￿commitment)￿are￿on
substantially￿the￿same￿terms￿as￿those￿agreed￿with￿Intel.￿Shares￿were￿acquired￿by￿Dutch￿foundations￿("Stichtingen")
established￿for￿each￿participant.

Investment Agreements
Pursuant￿to￿the￿Intel￿Investment￿Agreement,￿dated￿July￿9,￿2012,￿ASML￿issued￿to￿Intel￿Stichting￿ordinary￿shares￿equal￿to
15￿percent￿of￿the￿issued￿and￿outstanding￿ordinary￿shares￿with￿simultaneous￿issuance￿by￿the￿Intel￿Stichting￿to￿Intel￿of￿the
corresponding￿depositary￿receipts.

Pursuant￿to￿the￿TSMC￿Investment￿Agreement,￿dated￿August￿5,￿2012,￿ASML￿issued￿to￿TSMC￿Stichting￿ordinary￿shares
equal￿to￿5￿percent￿of￿the￿issued￿and￿outstanding￿ordinary￿shares￿with￿simultaneous￿issuance￿by￿the￿TSMC￿Stichting￿to
TSMC￿of￿the￿corresponding￿depositary￿receipts.

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Pursuant￿to￿the￿Samsung￿Investment￿Agreement,￿dated￿August￿27,￿2012￿ASML￿issued￿to￿the￿Samsung￿Stichting
ordinary￿shares￿equal￿to￿3￿percent￿of￿the￿issued￿and￿outstanding￿ordinary￿shares￿with￿simultaneous￿issuance￿by￿the
Samsung￿Stichting￿to￿Samsung￿of￿the￿corresponding￿depositary￿receipts.

The￿subscription￿price￿for￿the￿ordinary￿shares￿under￿the￿Investment￿Agreements￿was￿EUR￿39.91￿per￿ordinary￿share,
which￿is￿the￿average￿of￿the￿volume￿weighted￿average￿price￿of￿our￿shares￿listed￿at￿Euronext￿Amsterdam￿for￿the￿twenty
trading￿days￿up￿to￿and￿including￿July￿6,￿2012.

Based￿upon￿the￿subscription￿price￿(EUR￿39.91)￿included￿in￿the￿Investment￿Agreements,￿the￿equity￿participation￿of￿Intel
(15￿percent),￿TSMC￿(5￿percent)￿and￿Samsung￿(3￿percent)￿amount￿to￿EUR￿2,513￿million,￿EUR￿838￿million￿and￿EUR￿503
million,￿respectively.

Under￿the￿Intel￿Investment￿Agreements,￿ASML￿has￿agreed￿to￿indemnify￿the￿Participating￿Customers￿and￿their￿affiliates
for￿certain￿losses￿and￿expenses￿related￿to￿breaches￿of￿representations,￿warranties,￿covenants￿and￿agreements￿in￿the
Investment￿Agreements￿and￿with￿respect￿to￿certain￿legal￿proceedings￿related￿thereto,￿subject￿to￿certain￿limitations.

Shareholder Agreements
In￿connection￿with￿the￿issuance￿of￿shares￿pursuant￿to￿the￿Intel￿Investment￿Agreement,￿on￿September￿12,￿2012￿ASML,
Intel￿and￿the￿Intel￿Stichting￿entered￿into￿a￿Shareholder￿Agreement￿which￿governs￿certain￿matters￿relating￿to￿the￿holding
of￿and￿further￿investment￿by￿Intel￿in￿ordinary￿shares￿of￿ASML,￿directly￿and￿indirectly￿through￿the￿Intel￿Stichting,￿including
the￿matters￿described￿below.

The￿Shareholder￿Agreements￿between￿ASML￿and￿the￿other￿program￿participants￿(TSMC￿and￿Samsung)￿are￿on
substantially￿the￿same￿terms￿as￿those￿agreed￿with￿Intel.￿

Voting Restrictions
Pursuant￿to￿the￿Shareholder￿Agreement,￿Intel￿(and￿the￿Intel￿Stichting)￿will￿not￿be￿entitled￿to￿vote￿the￿ordinary￿shares￿that
were￿acquired￿by￿the￿Intel￿Stichting￿as￿part￿of￿the￿CCIP￿or￿any￿other￿ordinary￿shares￿otherwise￿transferred￿to￿the￿Intel
Stichting￿(under￿the￿circumstances￿described￿under￿"Standstill;￿Additional￿Purchases"￿below)￿prior￿to￿a￿Shareholder
Agreement￿Termination￿Event￿(as￿defined￿below),￿except￿when￿a￿Suspension￿Event￿(as￿described￿below)￿occurs￿and
is￿continuing￿or￿where￿the￿following￿matters￿are￿proposed￿at￿any￿General￿Meeting￿(the￿"Voting￿Restrictions"):￿(i)￿an
issuance￿of￿ASML￿shares￿or￿grant￿of￿rights￿to￿subscribe￿for￿ASML￿shares￿representing￿25￿percent￿or￿more￿of￿the￿issued
and￿outstanding￿share￿capital￿of￿ASML￿or￿the￿restriction￿or￿exclusion￿of￿pre-emption￿rights￿relating￿thereto￿(in￿each
case,￿on￿an￿aggregate￿basis￿during￿the￿preceding￿12￿months)￿or￿the￿designation￿of￿the￿BoM￿as￿the￿authorized￿body￿to
resolve￿on￿these￿matters;￿(ii)￿an￿authorization￿to￿repurchase￿25￿percent￿or￿more￿of￿ASML’s￿issued￿and￿outstanding￿share
capital￿on￿an￿aggregate￿basis￿during￿the￿preceding￿12￿months;￿(iii)￿the￿approval￿of￿a￿significant￿change￿in￿the￿identity
or￿nature￿of￿ASML￿or￿our￿business,￿including￿a￿transfer￿of￿all￿or￿substantially￿all￿business￿or￿assets￿of￿ASML￿and￿our
subsidiaries￿to￿a￿third￿party,￿the￿establishment￿or￿cancellation￿of￿a￿long-lasting￿cooperation￿of￿essential￿importance
with￿a￿third￿party￿and￿an￿acquisition￿or￿disposition￿of￿an￿interest￿in￿the￿capital￿or￿assets￿of￿a￿person￿with￿a￿value￿of￿at
least￿one￿third￿of￿the￿assets￿of￿ASML￿(on￿a￿consolidated￿basis);￿(iv)￿an￿amendment￿to￿ASML’s￿Articles￿of￿Association
that￿would￿materially￿affect￿the￿specific￿voting￿rights￿of￿Intel,￿would￿materially￿affect￿the￿identity￿or￿nature￿of￿ASML￿or
our￿business,￿or￿would￿disproportionately￿(or￿uniquely)￿and￿adversely￿affect￿the￿rights￿or￿benefits￿attached￿to￿or￿derived
from￿the￿ordinary￿shares￿held￿by￿Intel￿through￿the￿Intel￿Stichting￿as￿compared￿to￿the￿shareholders;￿(v)￿the￿dissolution￿of
ASML;￿and￿(vi)￿any￿merger￿or￿demerger￿which￿would￿result￿in￿a￿material￿change￿in￿the￿identity￿or￿nature￿of￿ASML￿or￿its
business.

Standstill, Lock-up and Orderly Market Arrangements
Standstill;￿Additional￿Purchases
Subject￿to￿certain￿exceptions,￿pursuant￿to￿the￿Shareholder￿Agreement,￿Intel￿(or￿its￿affiliates)￿may￿not,￿prior￿to￿the
six-year￿anniversary￿of￿the￿date￿of￿the￿Intel￿Shareholder￿Agreement￿(the￿"Standstill￿Period"),￿acquire￿more￿than￿19.9
percent￿of￿the￿outstanding￿share￿capital￿of￿ASML￿without￿ASML’s￿prior￿approval￿(the￿"Standstill￿Restriction").￿There￿is
an￿exception￿from￿the￿Standstill￿Restriction￿in￿the￿case￿of￿a￿‘suspension￿event’,￿which￿includes￿certain￿circumstances
where￿a￿third￿party￿has￿acquired￿or￿made￿an￿offer￿to￿acquire￿at￿least￿20￿percent￿of￿ASML’s￿outstanding￿shares,￿and￿the
Standstill￿Restriction￿will￿terminate￿upon￿the￿occurrence￿of￿a￿Shareholder￿Agreement￿Termination￿Event.

The￿Shareholder￿Agreement￿permits￿Intel￿(and￿its￿affiliates)￿to￿acquire￿up￿to￿4.99￿percent￿of￿ASML's￿outstanding￿shares
(other￿than￿shares￿acquired￿through￿the￿CCIP)￿that￿may￿be￿held￿outside￿the￿Intel￿Stichting.￿For￿any￿additional￿ASML
shares￿that￿Intel￿(or￿its￿affiliates)￿acquires￿in￿excess￿of￿4.99￿percent￿of￿the￿outstanding￿shares￿of￿ASML,￿Intel￿is￿required
to￿deposit￿such￿shares￿with￿the￿Intel￿Stichting￿in￿exchange￿for￿Depositary￿Receipts.￿Shares￿held￿directly￿by￿Intel￿or￿its
affiliates￿(and￿which￿not￿required￿to￿be￿deposited￿with￿the￿Intel￿Stichting)￿are￿not￿subject￿to￿the￿Voting￿Restrictions,￿or
Lock-Up￿Restrictions￿(as￿defined￿below),￿but￿are￿subject￿to￿the￿Standstill￿Restriction.

ASML￿ANNUAL￿REPORT￿2014

F-48

The￿Intel￿Stichting￿will￿continue￿to￿hold￿ASML￿shares￿owned￿by￿Intel￿(notwithstanding￿termination￿of￿the￿Standstill
Period)￿until￿the￿earlier￿of￿(i)￿￿such￿time￿as￿Intel￿owns￿(directly￿or￿through￿the￿Intel￿Stichting)￿less￿than￿2￿percent￿of
ASML’s￿outstanding￿shares￿(the￿relevant￿percentage￿is￿1￿percent￿for￿the￿other￿Participating￿Customers)￿(ii)￿the￿date
of￿notification￿to￿ASML￿by￿Participating￿Customers￿that￿the￿aggregate￿amount￿of￿ASML’s￿outstanding￿shares￿owned
by￿Intel￿and￿the￿other￿Participating￿Customers￿represents￿less￿than￿5￿percent￿of￿ASML’s￿outstanding￿shares￿and￿(iii)
a￿Shareholder￿Agreement￿Termination￿Event￿(as￿defined￿below),￿following￿which￿time￿Depositary￿Receipts￿will￿be
exchanged￿for￿the￿underlying￿ASML￿shares.￿In￿case￿Intel￿would￿acquire￿ASML￿shares￿within￿18￿months￿after￿an￿event
described￿under￿(i)￿or￿(ii)￿above,￿any￿ASML￿shares￿held￿by￿Intel￿in￿excess￿of￿4.99￿percent￿of￿the￿outstanding￿shares￿of
ASML￿must￿be￿transferred￿to￿(and￿held￿by)￿the￿Intel￿Stichting.

Lock-up;￿Orderly￿Sell￿Down
Intel￿may￿not,￿without￿prior￿written￿consent￿of￿ASML,￿transfer￿any￿ordinary￿shares￿or￿Depositary￿Receipts￿until￿the
earliest￿of￿(i)￿two￿years￿and￿six￿months￿after￿the￿date￿of￿the￿Intel￿Shareholder￿Agreement,￿(ii)￿termination￿of￿the￿NRE
Funding￿Agreements,￿and￿(iii)￿the￿occurrence￿of￿a￿Shareholder￿Agreement￿Termination￿Event￿￿((i),￿(ii)￿and￿(iii)￿together,￿the
"Lock-Up￿Restriction").￿The￿Lock-Up￿Restriction￿does￿not￿apply￿in￿certain￿circumstances￿where￿a￿third￿party￿offers￿to
acquire￿at￿least￿20￿percent￿of￿ASML’s￿shares.￿Intel￿is￿not￿permitted￿to￿transfer￿the￿ASML￿ordinary￿shares￿it￿acquired￿in
the￿program￿in￿connection￿with￿an￿offer￿(before￿the￿end￿of￿the￿offer),￿or￿make￿any￿public￿statement￿in￿support￿of￿such
offer,￿that￿is￿not￿recommended￿by￿the￿ASML￿Supervisory￿Board￿or￿BoM,￿except￿in￿limited￿circumstances.

In￿addition,￿Intel￿may￿not￿(even￿after￿the￿Lock-Up￿Period￿has￿ended),￿without￿written￿consent￿of￿ASML,￿transfer￿on
Euronext￿Amsterdam,￿NASDAQ￿or￿another￿securities￿exchange￿more￿than￿4￿percent￿of￿the￿outstanding￿shares￿of
ASML￿during￿any￿six￿month￿period￿(the￿relevant￿percentage￿is￿1.5￿percent￿for￿Samsung￿and￿2.5￿percent￿for￿TSMC);￿the
foregoing￿restriction￿does￿not￿apply￿to￿block￿trades￿or￿underwritten￿offers.￿There￿are￿also￿restrictions￿on￿Intel's￿ability￿to
transfer￿ASML￿shares￿to￿certain￿competitors￿or￿customers￿of￿ASML.

Termination
The￿Intel￿Shareholder￿Agreement￿will￿terminate￿upon￿the￿occurrence￿of￿the￿following￿events￿(each￿a￿"Shareholder
Agreement￿Termination￿Event")￿(i)￿certain￿change￿of￿control￿transactions￿where￿the￿shareholders￿of￿ASML￿prior￿to￿such
a￿transaction￿are￿no￿longer￿entitled￿to￿exercise￿at￿least￿50￿percent￿of￿the￿votes￿in￿the￿General￿Meeting￿following￿such
transaction,￿(ii)￿in￿the￿event￿of￿a￿delisting￿of￿our￿shares￿listed￿at￿Euronext￿Amsterdam￿or￿delisting￿of￿our￿shares￿listed￿at
NASDAQ￿(except￿for￿certain￿voluntary￿delistings￿from￿NASDAQ),￿(iii)￿the￿winding￿up￿or￿liquidation￿of￿ASML,￿or￿(iv)￿in￿the
event￿that￿all￿Depositary￿Receipts￿are￿exchanged￿for￿ASML￿shares￿and￿Intel￿does￿not￿acquire￿ASML￿shares￿in￿excess￿of
4.99￿percent￿of￿the￿outstanding￿ASML￿shares￿within￿18￿months￿of￿such￿exchange￿(see￿"Standstill;￿Additional￿Purchases"
above).

NRE Funding Agreements
On￿July￿9,￿2012,￿ASML￿and￿Intel￿entered￿into￿two￿NRE￿Funding￿Agreements￿pursuant￿to￿which￿Intel￿will￿support￿ASML’s
R&D￿costs￿and￿project￿expenditures.￿One￿agreement￿relates￿to￿the￿Intel￿450mm￿NRE￿Funding￿Agreement￿and￿the￿other
relates￿to￿the￿Intel￿EUV￿NRE￿Funding￿Agreement￿(together￿the￿"Intel￿NRE￿Funding￿Agreements").￿Intel￿has￿committed
to￿provide￿EUR￿553￿million￿in￿funding￿under￿the￿Intel￿450mm￿NRE￿Funding￿Agreement￿and￿EUR￿276￿million￿in￿funding
under￿the￿Intel￿EUV￿NRE￿Funding￿Agreement,￿payable￿over￿the￿respective￿terms￿(2013-2017)￿of￿the￿Intel￿NRE￿Funding
Agreements.

On￿August￿5,￿2012,￿ASML￿and￿TSMC￿entered￿into￿the￿TSMC￿NRE￿Funding￿Agreement￿pursuant￿to￿which￿TSMC￿will
support￿ASML’s￿R&D￿costs￿and￿project￿expenditures￿relating￿to￿the￿development￿of￿450mm￿lithography￿equipment￿and
EUV￿platforms.￿TSMC￿has￿committed￿to￿provide￿EUR￿276￿million￿in￿funding￿payable￿over￿the￿term￿(2013-2017)￿of￿the
TSMC￿NRE￿Funding￿Agreement.

On￿August￿27,￿2012,￿ASML￿and￿Samsung￿entered￿into￿the￿Samsung￿NRE￿Funding￿Agreement￿pursuant￿to￿which
Samsung￿will￿support￿ASML’s￿R&D￿costs￿and￿project￿expenditures￿relating￿to￿the￿development￿of￿300mm/450mm￿and
EUV￿platforms.￿Samsung￿has￿committed￿to￿provide￿EUR￿276￿million￿in￿funding￿payable￿over￿the￿term￿(2013-2017)￿of￿the
Samsung￿NRE￿Funding￿Agreement.

ASML￿ANNUAL￿REPORT￿2014

F-49

Under￿the￿NRE￿Funding￿Agreements,￿ASML￿will￿retain￿sole￿control￿over￿the￿development￿of￿450mm￿photo￿lithography
equipment￿and￿EUV￿platforms￿and￿will￿own￿all￿intellectual￿property￿created￿by￿ASML￿in￿connection￿therewith.￿The￿NRE
Funding￿Agreements￿provide￿that￿if￿ASML,￿in￿its￿reasonable￿discretion,￿determines￿to￿abandon￿either￿the￿450mm￿or￿EUV
development￿project,￿as￿a￿result￿of￿technical￿infeasibility￿or￿lack￿of￿sufficient￿industry￿demand,￿or￿if￿the￿then￿remaining
funding￿exceeds￿the￿expenditure￿estimate￿for￿the￿development￿project￿(450mm￿or￿EUV)￿then￿the￿parties￿may￿agree￿on￿an
alternative￿development￿project,￿and￿if￿no￿alternative￿is￿agreed,￿ASML￿may￿invoice￿the￿Participating￿Customers￿for￿the
remaining￿due￿portion￿of￿committed￿funding￿during￿each￿year￿of￿the￿remaining￿funding￿period￿in￿which￿ASML's￿actual
gross￿R&D￿expenditures￿exceed￿a￿minimum￿threshold￿specified￿in￿the￿NRE￿Funding￿Agreements.￿The￿NRE￿Funding
Agreements￿will￿terminate￿on￿December￿31,￿2017￿or￿upon￿pre-payment￿by￿the￿Participating￿Customer￿of￿the￿aggregate
amount￿of￿funding￿owed￿under￿its￿respective￿NRE￿Funding￿Agreement.

Commercial Agreement
On￿July￿9,￿2012,￿ASML￿and￿Intel￿entered￿into￿a￿Commercial￿Agreement,￿pursuant￿to￿which￿ASML￿and￿Intel￿established
a￿contractual￿framework￿for￿Intel￿to￿purchase￿equipment￿related￿to￿the￿450mm￿and￿EUV￿next-generation￿lithography
equipment.￿Under￿this￿agreement,￿Intel￿has￿committed￿to￿purchase￿specified￿numbers￿of￿450mm￿and￿EUV￿systems.
In￿April￿of￿2014,￿ASML￿and￿Intel￿amended￿the￿commercial￿agreement￿so￿that￿Intel￿would￿have￿an￿option￿of￿purchasing
either￿450mm￿systems￿or￿300mm￿systems￿in￿addition￿to￿EUV￿systems.￿The￿agreement￿and￿amendment￿set￿forth￿pricing
terms￿for￿the￿systems￿as￿well￿as￿milestones￿related￿to￿product￿deliveries,￿and￿provides￿for￿certain￿commercial￿discounts
in￿the￿form￿of￿credits￿in￿exchange￿for￿Intel’s￿early￿purchase￿commitments￿and￿volume￿purchase￿commitments￿and￿for
specified￿additional￿credits￿in￿the￿event￿that￿certain￿schedules￿are￿not￿met.￿In￿addition,￿subject￿to￿certain￿conditions,
ASML￿has￿agreed￿to￿install￿sufficient￿capacity￿to￿meet￿Intel's￿potential￿forecasted￿450mm￿lithography￿equipment￿needs
through￿2022.

For￿further￿details￿regarding￿the￿share￿issuances￿to￿the￿Participating￿Customers￿and￿the￿synthetic￿share￿buyback
effectuated￿in￿connection￿with￿our￿CCIP,￿see￿Note￿26.

29. Related Party Transactions
On￿July￿9,￿2012,￿we￿announced￿our￿CCIP￿to￿accelerate￿our￿development￿of￿EUV￿technology￿beyond￿the￿current
generation￿and￿our￿development￿of￿future￿450mm￿silicon￿wafer￿technology.￿One￿of￿the￿Participating￿Customers,￿Intel,
agreed￿to￿fund￿EUR￿829￿million￿for￿our￿R&D￿projects.￿In￿addition￿Intel￿also￿agreed￿to￿invest￿in￿ordinary￿shares￿equal￿to
15￿percent￿of￿our￿issued￿share￿capital￿(calculated￿giving￿effect￿to￿our￿synthetic￿share￿buyback￿in￿November￿2012).￿Due
to￿the￿equity￿investment,￿Intel￿is￿considered￿a￿related￿party￿of￿ASML￿as￿of￿July￿9,￿2012.

The￿total￿net￿sales￿to￿Intel￿(and￿its￿affiliates)￿in￿2014￿amounted￿to￿EUR￿1,007.6￿million￿(2013:￿EUR￿494.7￿million),￿whereas
the￿outstanding￿liability￿as￿of￿December￿31,￿2014￿amounted￿to￿EUR￿386.8￿million￿(December￿31,￿2013:￿EUR￿182.3
million).

There￿have￿been￿no￿transactions￿during￿our￿most￿recent￿fiscal￿year,￿and￿there￿are￿currently￿no￿transactions,￿between
ASML￿or￿any￿of￿its￿subsidiaries,￿and￿any￿other￿significant￿shareholder￿and￿any￿director￿or￿officer￿or￿any￿relative￿or
spouse￿thereof￿other￿than￿ordinary￿course￿compensation￿arrangements.￿During￿our￿most￿recent￿fiscal￿year,￿there￿has
been￿no,￿and￿at￿present￿there￿is￿no,￿outstanding￿indebtedness￿to￿ASML￿owed￿or￿owing￿by￿any￿director￿or￿officer￿of
ASML￿or￿any￿associate￿thereof.

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F-50

30. Subsequent Events
Subsequent￿events￿were￿evaluated￿up￿to￿February￿10,￿2015,￿which￿is￿the￿issuance￿date￿of￿this￿2014￿Annual￿Report.
There￿are￿no￿subsequent￿events￿to￿report.

Veldhoven,￿the￿Netherlands

February￿10,￿2015

￿

￿

￿/s/￿Peter￿T.F.M.￿Wennink
Peter￿T.F.M.￿Wennink
President,￿CEO￿and￿member￿of￿the￿Board￿of￿Management

￿￿

￿

￿/s/￿Wolfgang￿U.￿Nickl
Wolfgang￿U.￿Nickl
Executive￿Vice￿President,￿CFO￿and￿member￿of￿the￿Board￿of￿Management

ASML￿ANNUAL￿REPORT￿2014

F-51

Report of Independent Registered Public Accounting Firm
To:￿the￿Supervisory￿Board￿and￿Shareholders￿of￿ASML￿Holding￿N.V.:

We￿have￿audited￿the￿accompanying￿balance￿sheets￿of￿ASML￿Holding￿N.V.￿and￿subsidiaries￿(collectively,￿the￿"Company")
as￿of￿December￿31,￿2014￿and￿2013,￿and￿the￿related￿consolidated￿statements￿of￿income,￿shareholders'￿equity￿and
comprehensive￿income,￿and￿cash￿flows￿for￿each￿of￿the￿years￿in￿the￿three-year￿period￿ended￿December￿31,￿2014.￿We
also￿have￿audited￿the￿Company's￿internal￿control￿over￿financial￿reporting￿as￿of￿December￿31,￿2014,￿based￿on￿criteria
established￿in￿Internal Control—Integrated Framework (2013) issued￿by￿the￿Committee￿of￿Sponsoring￿Organizations￿of
the￿Treadway￿Commission.￿The￿Company's￿management￿is￿responsible￿for￿these￿financial￿statements,￿for￿maintaining
effective￿internal￿control￿over￿financial￿reporting,￿and￿for￿its￿assessment￿of￿the￿effectiveness￿of￿internal￿control￿over
financial￿reporting,￿included￿in￿the￿accompanying￿Management’s￿Report￿on￿Internal￿Control￿over￿Financial￿Reporting.
Our￿responsibility￿is￿to￿express￿an￿opinion￿on￿these￿financial￿statements￿and￿an￿opinion￿on￿the￿Company's￿internal
control￿over￿financial￿reporting￿based￿on￿our￿audits.

We￿conducted￿our￿audits￿in￿accordance￿with￿the￿standards￿of￿the￿Public￿Company￿Accounting￿Oversight￿Board￿(United
States).￿Those￿standards￿require￿that￿we￿plan￿and￿perform￿the￿audits￿to￿obtain￿reasonable￿assurance￿about￿whether
the￿financial￿statements￿are￿free￿of￿material￿misstatement￿and￿whether￿effective￿internal￿control￿over￿financial￿reporting
was￿maintained￿in￿all￿material￿respects.￿Our￿audits￿of￿the￿financial￿statements￿included￿examining,￿on￿a￿test￿basis,
evidence￿supporting￿the￿amounts￿and￿disclosures￿in￿the￿financial￿statements,￿assessing￿the￿accounting￿principles￿used
and￿significant￿estimates￿made￿by￿management,￿and￿evaluating￿the￿overall￿financial￿statement￿presentation.￿Our￿audit￿of
internal￿control￿over￿financial￿reporting￿included￿obtaining￿an￿understanding￿of￿internal￿control￿over￿financial￿reporting,
assessing￿the￿risk￿that￿a￿material￿weakness￿exists,￿and￿testing￿and￿evaluating￿the￿design￿and￿operating￿effectiveness
of￿internal￿control￿based￿on￿the￿assessed￿risk.￿Our￿audits￿also￿included￿performing￿such￿other￿procedures￿as￿we
considered￿necessary￿in￿the￿circumstances.￿We￿believe￿that￿our￿audits￿provide￿a￿reasonable￿basis￿for￿our￿opinions.

A￿company's￿internal￿control￿over￿financial￿reporting￿is￿a￿process￿designed￿to￿provide￿reasonable￿assurance￿regarding
the￿reliability￿of￿financial￿reporting￿and￿the￿preparation￿of￿financial￿statements￿for￿external￿purposes￿in￿accordance￿with
generally￿accepted￿accounting￿principles.￿A￿company's￿internal￿control￿over￿financial￿reporting￿includes￿those￿policies
and￿procedures￿that￿(1)￿pertain￿to￿the￿maintenance￿of￿records￿that,￿in￿reasonable￿detail,￿accurately￿and￿fairly￿reflect
the￿transactions￿and￿dispositions￿of￿the￿assets￿of￿the￿company;￿(2)￿provide￿reasonable￿assurance￿that￿transactions￿are
recorded￿as￿necessary￿to￿permit￿preparation￿of￿financial￿statements￿in￿accordance￿with￿generally￿accepted￿accounting
principles,￿and￿that￿receipts￿and￿expenditures￿of￿the￿company￿are￿being￿made￿only￿in￿accordance￿with￿authorizations
of￿management￿and￿directors￿of￿the￿company;￿and￿(3)￿provide￿reasonable￿assurance￿regarding￿prevention￿or￿timely
detection￿of￿unauthorized￿acquisition,￿use,￿or￿disposition￿of￿the￿company's￿assets￿that￿could￿have￿a￿material￿effect￿on
the￿financial￿statements.

Because￿of￿its￿inherent￿limitations,￿internal￿control￿over￿financial￿reporting￿may￿not￿prevent￿or￿detect￿misstatements.
Also,￿projections￿of￿any￿evaluation￿of￿effectiveness￿to￿future￿periods￿are￿subject￿to￿the￿risk￿that￿controls￿may￿become
inadequate￿because￿of￿changes￿in￿conditions,￿or￿that￿the￿degree￿of￿compliance￿with￿the￿policies￿or￿procedures￿may
deteriorate.

In￿our￿opinion,￿the￿consolidated￿financial￿statements￿referred￿to￿above￿present￿fairly,￿in￿all￿material￿respects,￿the
financial￿position￿of￿ASML￿Holding￿N.V.￿and￿its￿subsidiaries￿as￿of￿December￿31,￿2014￿and￿2013,￿and￿the￿results￿of￿its
operations￿and￿its￿cash￿flows￿for￿each￿of￿the￿years￿in￿the￿three-year￿period￿ended￿December￿31,￿2014￿in￿conformity￿with
accounting￿principles￿generally￿accepted￿in￿the￿United￿States￿of￿America.￿Also￿in￿our￿opinion,￿the￿Company￿maintained,
in￿all￿material￿respects,￿effective￿internal￿control￿over￿financial￿reporting￿as￿of￿December￿31,￿2014,￿based￿on￿criteria
established￿in Internal Control – Integrated Framework (2013) issued￿by￿the￿Committee￿of￿Sponsoring￿Organizations￿of
the￿Treadway￿Commission.

/s/￿Deloitte￿Accountants￿B.V.

Eindhoven,￿The￿Netherlands

February￿10,￿2015

ASML￿ANNUAL￿REPORT￿2014

F-52

Exhibit Index

ASML￿ANNUAL￿REPORT￿2014

E-1

Exhibit Index

Exhibit￿No.
1

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

4.12

4.13

4.14

4.15

4.16

4.17

4.18

4.19

4.20

4.21

4.22

4.23

4.24

4.25

4.26

4.27

4.28

8.1
12.1
13.1
15.1
101.INS

Description
Articles￿of￿Association￿of￿ASML￿Holding￿N.V.￿(English￿translation)￿(Incorporated￿by￿reference￿to￿Amendment￿No.￿13￿to￿the
Registrant’s￿Registration￿Statement￿on￿Form￿8-A/A,￿filed￿with￿the￿SEC￿on￿February￿8,￿2013)
Agreement￿between￿ASM￿Lithography￿B.V.￿and￿Carl￿Zeiss,￿dated￿March￿17,￿2000￿(Incorporated￿by￿reference￿to￿the
Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿fiscal￿year￿ended￿December￿31,￿2000)￿1
Agreement￿between￿ASML￿Holding￿N.V.￿and￿Carl￿Zeiss,￿dated￿October￿24,￿2003￿(Incorporated￿by￿reference￿to￿the
Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2003)￿1
Form￿of￿Indemnity￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿members￿of￿its￿Board￿of￿Management￿(Incorporated￿by
reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2003)
Form￿of￿Indemnity￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿members￿of￿its￿Supervisory￿Board￿(Incorporated￿by
reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2003)
Form￿of￿Employment￿Agreement￿for￿members￿of￿the￿Board￿of￿Management￿(Incorporated￿by￿reference￿to￿the￿Registrant’s
Annual￿Report￿on￿Form￿20-F￿for￿the￿fiscal￿year￿ended￿December￿31,￿2003)
Nikon-ASML￿Patent￿Cross-License￿Agreement,￿dated￿December￿10,￿2004,￿between￿ASML￿Holding￿N.V.￿and￿Nikon
Corporation1,2
ASML/Zeiss￿Sublicense￿Agreement,￿dated￿December￿10,￿2004,￿between￿Carl￿Zeiss￿SMT￿AG￿and￿ASML￿Holding￿N.V.
(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿fiscal￿year￿ended￿December￿31,￿2004)￿1
ASML￿Incentive￿and￿New￿Hire￿Option￿Plan￿for￿Board￿of￿Management￿(Incorporated￿by￿reference￿to￿the￿Registrant’s
Registration￿Statement￿on￿Form￿S-8,￿filed￿with￿the￿SEC￿on￿June￿9,￿2004￿(File￿No.￿333-116337))
ASML￿Option￿Plan￿for￿Management￿of￿ASML￿Holding￿Group￿Companies￿(Incorporated￿by￿reference￿to￿the￿Registrant’s
Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿June￿30,￿2005￿(file￿No.￿333-126340))
￿ASML￿Stock￿Option￿Plan￿for￿New￿Hire￿Options￿granted￿to￿Members￿of￿the￿Board￿of￿Management￿(Version￿April￿2006)
(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿August￿7,￿2006
(file￿No.￿333-136362))
ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿April
2006)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿August￿7,
2006￿(file￿No.￿333-136362))
ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿July
2006)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿August￿7,
2006￿(file￿No.￿333-136362))
ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version
October￿2006)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on
August￿7,￿2006￿(file￿No.￿333-136362))
ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿January
2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿July￿5,
2007￿(file￿No.￿333-144356))
ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿April
2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿July￿5,
2007￿(file￿No.￿333-144356))
ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿July
2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿July￿5,
2007￿(file￿No.￿333-144356))
ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version
October￿2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on
July￿5,￿2007￿(file￿No.￿333-144356))
ASML￿Performance￿Stock￿Plan￿for￿Members￿of￿the￿Board￿of￿Management￿(Version￿1)￿(Incorporated￿by￿reference￿to￿the
Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿July￿5,￿2007￿(file￿No.￿333-144356))
ASML￿Performance￿Stock￿Option￿Plan￿for￿Members￿of￿the￿Board￿of￿Management￿(Version￿2)￿(Incorporated￿by￿reference￿to
the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿July￿5,￿2007￿(file￿No.￿333-144356))
ASML￿Stock￿Option￿Plan￿from￿Base￿Salary￿for￿Senior￿&￿Executive￿Management￿(Version￿October￿2007)￿(Incorporated
by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿November￿2,￿2007￿(file￿No.
333-147128))
ASML￿Performance￿Stock￿Option￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the
Registrant’s.￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿August￿29,￿2008￿(file￿No.￿333-153277))
ASML￿Performance￿Share￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the
Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿August￿29,￿2008￿(file￿No.￿333-153277))
ASML￿Performance￿Stock￿Plan￿for￿Members￿of￿the￿Board￿of￿Management￿(Incorporated￿by￿reference￿to￿the￿Registrant’s
Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿October￿13,￿2009￿(file￿No.￿333-162439))
ASML￿Performance￿Stock￿Option￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the
Registrant’s.￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿October￿13,￿2009￿(file￿No.￿333-162439))
ASML￿Performance￿Share￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the
Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿SEC￿on￿October￿13,￿2009￿(file￿No.￿333-162439))
450mm￿NRE￿Funding￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿Intel￿Corporation,￿dated￿July￿9,￿2012￿(Incorporated￿by
reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2012)1
EUV￿NRE￿Funding￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿Intel￿Corporation,￿dated￿July￿9,￿2012￿(Incorporated￿by
reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2012)1
Shareholder￿Agreement￿between￿ASML￿Holding￿N.V.,￿Intel￿Holdings￿B.V.,￿Intel￿Corporation￿and￿Stichting
Administratiekantoor￿MAKTSJAB￿dated￿September￿12,￿2012￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Annual￿Report
on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2012)
List￿of￿Main￿Subsidiaries2
Certification￿of￿CEO￿and￿CFO￿Pursuant￿to￿Rule￿13a-14(a)￿of￿the￿Securities￿Exchange￿Act￿of￿1934￿2
Certification￿of￿CEO￿and￿CFO￿Pursuant￿to￿Rule￿13a-14(b)￿of￿the￿Securities￿Exchange￿Act￿of￿1934￿2
Consent￿of￿Deloitte￿Accountants￿B.V.2
XBRL￿Instance￿Document2

ASML￿ANNUAL￿REPORT￿2014

E-2

Exhibit￿No.
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE

Description
XBRL￿Taxonomy￿Extension￿Schema￿Document￿2
XBRL￿Taxonomy￿Extension￿Calculation￿Linkbase￿Document￿2
XBRL￿Taxonomy￿Extension￿Definition￿Linkbase￿Document￿2
XBRL￿Taxonomy￿Extension￿Label￿Linkbase￿Document￿2
XBRL￿Taxonomy￿Extension￿Presentation￿Linkbase￿Document￿2

1
2

Certain￿information￿omitted￿pursuant￿to￿a￿request￿for￿confidential￿treatment￿filed￿separately￿with￿the￿Securities￿and￿Exchange￿Commission.
Filed￿at￿the￿SEC￿herewith.

ASML￿ANNUAL￿REPORT￿2014

E-3

Exhibit 8.1

List of Main Subsidiaries

Legal Entity

Country of Incorporation

Main subsidiaries of ASML Holding N.V.1:
ASML￿Netherlands￿B.V.
ASML￿Systems￿B.V.
ASML￿Germany￿GmbH
ASML￿France￿S.a.r.l.
ASML￿(UK)￿Ltd.
ASML￿Israel￿(2001)￿Ltd.
ASML￿Ireland￿Ltd.
ASML￿Italy￿S.r.l.
ASML￿Hong￿Kong￿Ltd.
ASML￿Singapore￿Pte.￿Ltd.
ASML￿Korea￿Co.￿Ltd.
ASML￿Japan￿Co.￿Ltd.
ASML￿(Shanghai)￿Lithography￿Facilities￿Science￿and￿Technology￿Co.￿Ltd.
ASML￿Taiwan￿Ltd.
ASML￿Equipment￿Malaysia￿Sdn.￿Bhd.
ASML￿Belgium￿BVBA
ASML￿Belgium￿Finance￿CV
Brion￿Technologies￿(Shenzhen)￿Co.￿Ltd.
Brion￿Technologies,￿Inc.
ASML￿US,￿Inc.
ASML￿Capital￿US,￿Inc.
ASML￿MaskTools,￿Inc.
ASML￿Participations￿US￿Inc.
Lehrer￿Pearson,￿Inc.
ASML￿Ventures￿1,￿Inc.
Cymer,￿LLC.
eLith￿LLC.
ASML￿Hong￿Kong￿Logistic￿Services￿Ltd.
Cymer￿B.V.
Cymer￿Japan,￿Inc.
Cymer￿Korea,￿Inc.
Cymer￿Singapore￿Pte￿Ltd.
Cymer￿Southeast￿Asia￿Ltd.
Cymer￿Semiconductor￿Equipment￿(Shanghai)￿Co.￿Ltd.
TCZ,￿LLC.
TCZ￿Pte￿Ltd.
TCZ￿GmbH

Netherlands￿(Veldhoven)
Netherlands￿(Veldhoven)
Germany￿(Dresden)
France￿(Bernin)
UK￿(Edinburgh￿(Scotland))
Israel￿(Ramat-Gan)
Ireland￿(Dublin)
Italy￿(Avezzano)
Hong￿Kong￿SAR
Singapore
Korea￿(Kyunggi-Do)
Japan￿(Kawasaki-shi,￿Kanagawa-Ken)
China￿(Shanghai)
Taiwan￿(Hsinchu)
Malaysia￿(Penang)
Belgium￿(Essen)
Belgium￿(Essen)
China￿(Shenzhen)
US￿(Wilmington,￿Delaware)
US￿(Wilmington,￿Delaware)
US￿(Wilmington,￿Delaware)
US￿(Dover,￿Delaware)
US￿(Wilmington,￿Delaware)
US￿(Wilmington,￿Delaware)
US￿(Wilmington,￿Delaware)
US￿(Reno,￿Nevada)
US￿(Wilmington,￿Delaware)
Hong￿Kong￿SAR
Netherlands￿(Amsterdam)
Japan￿(Tokyo)
Korea￿(Kyunggi-Do)
Singapore
Taiwan￿(Hsinchu)
China￿(Pudong)
US￿(Reno,￿Nevada)
Singapore
Germany￿(Oberkochen)

1

All￿of￿our￿subsidiaries￿are￿(directly￿or￿indirectly)￿wholly-owned,￿with￿exception￿of￿eLith￿LLC,￿in￿which￿we￿hold￿an￿interest￿of￿50￿percent.

ASML￿ANNUAL￿REPORT￿2014

E-4

Exhibit 12.1

Certification of the Chief Executive Officer

I,￿Peter￿T.F.M.￿Wennink,￿certify￿that:

1.￿I￿have￿reviewed￿this￿Annual￿Report￿on￿Form￿20-F￿of￿ASML￿Holding￿N.V.;

2.￿Based￿on￿my￿knowledge,￿this￿report￿does￿not￿contain￿any￿untrue￿statement￿of￿a￿material￿fact￿or￿omit￿to￿state￿a
material￿fact￿necessary￿to￿make￿the￿statements￿made,￿in￿light￿of￿the￿circumstances￿under￿which￿such￿statements￿were
made,￿not￿misleading￿with￿respect￿to￿the￿period￿covered￿by￿this￿report;

3.￿Based￿on￿my￿knowledge,￿the￿Financial￿Statements,￿and￿other￿financial￿information￿included￿in￿this￿report,￿fairly
present￿in￿all￿material￿respects￿the￿financial￿condition,￿results￿of￿operations￿and￿cash￿flows￿of￿the￿company￿as￿of,￿and
for,￿the￿periods￿presented￿in￿this￿report;

4.￿The￿company's￿other￿certifying￿officer(s)￿and￿I￿are￿responsible￿for￿establishing￿and￿maintaining￿disclosure￿controls
and￿procedures￿(as￿defined￿in￿Exchange￿Act￿Rules￿13a-15(e)￿and￿15d-15(e))￿and￿internal￿control￿over￿financial￿reporting
(as￿defined￿in￿Exchange￿Act￿Rules￿13a-15(f)￿and￿15d-15(f))for￿the￿company￿and￿have:
a)￿Designed￿such￿disclosure￿controls￿and￿procedures,￿or￿caused￿such￿disclosure￿controls￿and￿procedures￿to￿be
designed￿under￿our￿supervision,￿to￿ensure￿that￿material￿information￿relating￿to￿the￿company,￿including￿its￿consolidated
subsidiaries,￿is￿made￿known￿to￿us￿by￿others￿within￿those￿entities,￿particularly￿during￿the￿period￿in￿which￿this￿report￿is
being￿prepared;
b)￿Designed￿such￿internal￿control￿over￿financial￿reporting,￿or￿caused￿such￿internal￿control￿over￿financial￿reporting￿to￿be
designed￿under￿our￿supervision,￿to￿provide￿reasonable￿assurance￿regarding￿the￿reliability￿of￿financial￿reporting￿and￿the
preparation￿of￿Financial￿Statements￿for￿external￿purposes￿in￿accordance￿with￿generally￿accepted￿accounting￿principles;
c)￿Evaluated￿the￿effectiveness￿of￿the￿company’s￿disclosure￿controls￿and￿procedures￿and￿presented￿in￿this￿report￿our
conclusions￿about￿the￿effectiveness￿of￿the￿disclosure￿controls￿and￿procedures,￿as￿of￿the￿end￿of￿the￿period￿covered￿by
this￿report￿based￿on￿such￿evaluation;￿and
d)￿Disclosed￿in￿this￿report￿any￿change￿in￿the￿company’s￿internal￿control￿over￿financial￿reporting￿that￿occurred￿during
the￿period￿covered￿by￿the￿Annual￿Report￿that￿has￿materially￿affected,￿or￿is￿reasonably￿likely￿to￿materially￿affect,￿the
company’s￿internal￿control￿over￿financial￿reporting;￿and

5.￿The￿company’s￿other￿certifying￿officer(s)￿and￿I￿have￿disclosed,￿based￿on￿our￿most￿recent￿evaluation￿of￿internal￿control
over￿financial￿reporting,￿to￿the￿company’s￿auditors￿and￿the￿audit￿Committee￿of￿the￿company's￿board￿of￿directors￿(or
persons￿performing￿the￿equivalent￿functions):
a)￿All￿significant￿deficiencies￿and￿material￿weaknesses￿in￿the￿design￿or￿operation￿of￿internal￿control￿over￿financial
reporting￿which￿are￿reasonably￿likely￿to￿adversely￿affect￿the￿company’s￿ability￿to￿record,￿process,￿summarize￿and￿report
financial￿information;￿and
b)￿Any￿fraud,￿whether￿or￿not￿material,￿that￿involves￿management￿or￿other￿employees￿who￿have￿a￿significant￿role￿in￿the
company’s￿internal￿control￿over￿financial￿reporting.

Date:￿February￿10,￿2015

￿

/s/￿Peter￿T.F.M.￿Wennink
Peter￿T.F.M.￿Wennink
President,￿CEO￿and￿member￿of￿the￿Board￿of￿Management

ASML￿ANNUAL￿REPORT￿2014

E-5

Certification of the Chief Financial Officer

I,￿Wolfgang￿U.￿Nickl,￿certify￿that:

1.￿I￿have￿reviewed￿this￿Annual￿Report￿on￿Form￿20-F￿of￿ASML￿Holding￿N.V.;

2.￿Based￿on￿my￿knowledge,￿this￿report￿does￿not￿contain￿any￿untrue￿statement￿of￿a￿material￿fact￿or￿omit￿to￿state￿a
material￿fact￿necessary￿to￿make￿the￿statements￿made,￿in￿light￿of￿the￿circumstances￿under￿which￿such￿statements￿were
made,￿not￿misleading￿with￿respect￿to￿the￿period￿covered￿by￿this￿report;

3.￿Based￿on￿my￿knowledge,￿the￿Financial￿Statements,￿and￿other￿financial￿information￿included￿in￿this￿report,￿fairly
present￿in￿all￿material￿respects￿the￿financial￿condition,￿results￿of￿operations￿and￿cash￿flows￿of￿the￿company￿as￿of,￿and
for,￿the￿periods￿presented￿in￿this￿report;

4.￿The￿company’s￿other￿certifying￿officer(s)￿and￿I￿are￿responsible￿for￿establishing￿and￿maintaining￿disclosure￿controls￿and
procedures￿(as￿defined￿in￿Exchange￿Act￿Rules￿13a-15(e)￿and￿15d-15(e))￿and￿internal￿control￿over￿financial￿reporting￿(as
defined￿in￿Exchange￿Act￿Rules￿13a-15(f)￿and￿15d-15(f))for￿the￿company￿and￿have:
a)￿Designed￿such￿disclosure￿controls￿and￿procedures,￿or￿caused￿such￿disclosure￿controls￿and￿procedures￿to￿be
designed￿under￿our￿supervision,￿to￿ensure￿that￿material￿information￿relating￿to￿the￿company,￿including￿its￿consolidated
subsidiaries,￿is￿made￿known￿to￿us￿by￿others￿within￿those￿entities,￿particularly￿during￿the￿period￿in￿which￿this￿report￿is
being￿prepared;
b)￿Designed￿such￿internal￿control￿over￿financial￿reporting,￿or￿caused￿such￿internal￿control￿over￿financial￿reporting￿to￿be
designed￿under￿our￿supervision,￿to￿provide￿reasonable￿assurance￿regarding￿the￿reliability￿of￿financial￿reporting￿and￿the
preparation￿of￿Financial￿Statements￿for￿external￿purposes￿in￿accordance￿with￿generally￿accepted￿accounting￿principles;
c)￿Evaluated￿the￿effectiveness￿of￿the￿company’s￿disclosure￿controls￿and￿procedures￿and￿presented￿in￿this￿report￿our
conclusions￿about￿the￿effectiveness￿of￿the￿disclosure￿controls￿and￿procedures,￿as￿of￿the￿end￿of￿the￿period￿covered￿by
this￿report￿based￿on￿such￿evaluation;￿and
d)￿Disclosed￿in￿this￿report￿any￿change￿in￿the￿company’s￿internal￿control￿over￿financial￿reporting￿that￿occurred￿during
the￿period￿covered￿by￿the￿Annual￿Report￿that￿has￿materially￿affected,￿or￿is￿reasonably￿likely￿to￿materially￿affect,￿the
company’s￿internal￿control￿over￿financial￿reporting;￿and

5.￿The￿company’s￿other￿certifying￿officer(s)￿and￿I￿have￿disclosed,￿based￿on￿our￿most￿recent￿evaluation￿of￿internal￿control
over￿financial￿reporting,￿to￿the￿company’s￿auditors￿and￿the￿audit￿committee￿of￿the￿company's￿board￿of￿directors￿(or
persons￿performing￿the￿equivalent￿functions):
a)￿All￿significant￿deficiencies￿and￿material￿weaknesses￿in￿the￿design￿or￿operation￿of￿internal￿control￿over￿financial
reporting￿which￿are￿reasonably￿likely￿to￿adversely￿affect￿the￿company’s￿ability￿to￿record,￿process,￿summarize￿and￿report
financial￿information;￿and
b)￿Any￿fraud,￿whether￿or￿not￿material,￿that￿involves￿management￿or￿other￿employees￿who￿have￿a￿significant￿role￿in￿the
company’s￿internal￿control￿over￿financial￿reporting.

￿

Date:￿February￿10,￿2015

￿

/s/￿Wolfgang￿U.￿Nickl
Wolfgang￿U.￿Nickl
Executive￿Vice￿President,￿CFO￿and￿member￿of￿the￿Board￿of￿Management

ASML￿ANNUAL￿REPORT￿2014

E-6

Exhibit 13.1

Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

In￿connection￿with￿the￿Annual￿Report￿on￿Form￿20-F￿of￿ASML￿Holding￿N.V.￿for￿the￿fiscal￿year￿ended￿December￿31,￿2014
as￿filed￿with￿the￿SEC￿on￿the￿date￿hereof,￿Peter￿T.F.M.￿Wennink,￿as￿CEO￿of￿the￿Company,￿and￿Wolfgang￿U.￿Nickl,￿as￿CFO
of￿the￿Company,￿each￿hereby￿certifies,￿pursuant￿to￿18￿U.S.C.￿Section￿1350,￿as￿adopted￿pursuant￿to￿Section￿906￿of￿the
Sarbanes-Oxley￿Act￿of￿2002,￿that,￿to￿the￿best￿of￿his￿knowledge:

(1)The￿Report￿fully￿complies￿with￿the￿requirements￿of￿Section￿13(a)￿or￿15(d)￿of￿the￿Exchange￿Act;￿and

(2)The￿information￿contained￿in￿the￿Report￿fairly￿presents,￿in￿all￿material￿respects,￿the￿financial￿condition￿and￿results￿of
operations￿of￿the￿issuer.

￿

￿￿

/s/￿Peter￿T.F.M.￿Wennink
Name:￿Peter￿T.F.M.￿Wennink
Title:￿President,￿CEO￿and￿member￿of￿the￿Board￿of￿Management
Date:￿February￿10,￿2015

￿

￿

/s/￿Wolfgang￿U.￿Nickl
Name:￿Wolfgang￿U.￿Nickl
Title:￿Executive￿Vice￿President,￿CFO￿and￿member￿of￿the￿Board￿of￿Management
Date:￿February￿10,￿2015

A￿signed￿original￿of￿this￿written￿statement￿required￿by￿Section￿906￿of￿the￿Sarbanes-Oxley￿Act￿of￿2002￿has￿been￿provided
to￿the￿Company￿and￿will￿be￿retained￿by￿the￿Company￿and￿furnished￿to￿the￿SEC￿or￿its￿staff￿upon￿request.

This￿certification￿accompanies￿the￿Report￿pursuant￿to￿section￿906￿of￿the￿Sarbanes-Oxley￿Act￿of￿2002￿and￿shall￿not,
except￿to￿the￿extent￿required￿by￿the￿Sarbanes-Oxley￿Act￿of￿2002,￿be￿deemed￿filed￿by￿the￿Company￿for￿purposes￿of
section￿18￿of￿the￿Securities￿Exchange￿Act￿of￿1934.

ASML￿ANNUAL￿REPORT￿2014

E-7

Exhibit 15.1

Consent of Independent Registered Public Accounting Firm

To￿the￿Supervisory￿Board￿and￿Shareholders￿of￿ASML￿Holding￿N.V.:

We￿consent￿to￿the￿incorporation￿by￿reference￿in￿the￿following￿Registration￿Statements￿on￿Form￿S-8￿(Nos.￿333-116337,
333-126340,￿333-136362,￿333-141125,￿333-142254,￿333-144356,￿333-147128,￿333-153277,￿333-162439,￿333-170034,
333-188938,￿333-190023,￿and￿333-192951)￿of￿our￿report￿dated￿February￿10,￿2015,￿relating￿to￿the￿financial￿statements
of￿ASML￿Holding￿N.V.￿and￿subsidiaries￿(collectively,￿the￿"Company")￿and￿the￿effectiveness￿of￿the￿Company’s￿internal
control￿over￿financial￿reporting,￿appearing￿in￿the￿Annual￿Report￿on￿Form￿20-F￿of￿ASML￿Holding￿N.V.￿for￿the￿year￿ended
December￿31,￿2014.

￿

/s/￿Deloitte￿Accountants￿B.V.
Deloitte￿Accountants￿B.V.
Eindhoven,￿The￿Netherlands
February￿10,￿2015

ASML￿ANNUAL￿REPORT￿2014

E-8

Definitions

Name

ACE

AFM

AGM

AMD

Description

ASML￿Center￿of￿Excellence

Autoriteit￿Financiële￿Markten;￿the￿Netherlands￿Authority￿for￿the￿Financial￿Markets

Annual￿General￿Meeting￿of￿Shareholders￿(held￿on￿April￿23,￿2014,￿April￿24,￿2013￿and￿planned￿for
April￿22,￿2015)

Advanced￿Micro￿Devices,￿Inc.

Annual￿Report

Annual￿Report￿on￿Form￿20-F

ArF

ArFi

ASML

Argon￿Fluoride

Argon￿Fluoride￿Immersion

ASML￿Holding￿N.V.￿and￿its￿subsidiaries

ASML's￿Website

www.asml.com

ASP

ASU

BA

BESP

BoM

Brion

Canon

Average￿Selling￿Price

Accounting￿Standards￿Update

Bachelor￿of￿Arts

Best￿Estimate￿of￿Selling￿Price

Board￿of￿Management

Brion￿Technologies,￿Inc.

Canon￿Kabushiki￿Kaisha

Canon￿Cross-License
Agreement

ASML￿and￿Canon￿signed￿a￿global￿patent￿cross-license￿agreement￿related￿to￿the￿field￿of
semiconductor￿lithography

CCIP

CD

CEO

CFO

CMO

Customer￿Co-Investment￿Program

Critical￿Dimension

Chief￿Executive￿Officer

Chief￿Financial￿Officer

Chief￿Marketing￿Officer

Code￿of￿Conduct

Code￿of￿ethics￿and￿conduct

Company

ASML￿Holding￿N.V.

COO

CPO

CR

CRMC

Cross-License
Transition￿Period

CRSB

CTO

Customer￿Stichtingen

Chief￿Operations￿Officer

Chief￿Program￿Officer

Corporate￿Responsibility

Capital￿Research￿&￿Management￿Company

The￿period￿between￿January￿1,￿2010￿and￿December￿31,￿2014

Corporate￿Risk￿and￿Sustainability￿Board

Chief￿Technology￿Officer

Intel￿Stichting￿and￿TSMC￿Stichting￿jointly￿referred.￿Shares￿held￿by￿Participating￿Customers￿in
the￿CCIP,￿are￿held￿through￿Foundations￿that￿issued￿to￿the￿Participating￿Customers￿depository
receipts￿representing￿shares￿held￿by￿these￿Foundations.

Cymer

Cymer￿Inc.￿and￿its￿subsidiaries

De￿Nederlandsche
Bank

Deloitte

DPT

The￿Dutch￿Central￿Bank,￿which￿is￿the￿supervisor￿of￿all￿pension￿companies￿in￿the￿Netherlands

Deloitte￿Accountants￿B.V.

Double￿Patterning￿Technology

ASML￿ANNUAL￿REPORT￿2014

D-1

Name

DTC

EGM

Eurobonds

Description

Depositary￿Trust￿Company

Extraordinary￿General￿Meeting￿of￿Shareholders

Our￿EUR￿600￿million￿5.75￿percent￿senior￿notes￿due￿2017￿and￿our￿EUR￿750￿million￿3.375￿percent
senior￿notes￿due￿2023

Euroclear￿Nederland

Nederlands￿Centraal￿Instituut￿voor￿Giraal￿Effectenverkeer￿B.V.

EUV

Extreme￿Ultraviolet

Exchange￿Act

US￿Securities￿Exchange￿Act￿of￿1934

FASB

FAT

FIRPTA

FMSA

FOM

Financial￿Accounting￿Standards￿Board

Factory￿Acceptance￿Test

Foreign￿Investment￿in￿Real￿Property￿Tax￿Act

Financial￿Markets￿Supervision￿Act￿('Wet￿op￿het￿financieel￿toezicht'￿(Wft))

Foundation￿for￿Fundamental￿Research￿on￿Matter￿and￿part￿of￿NWO￿('Stichting￿voor
Fundamenteel￿onderzoek￿der￿Materie￿en￿onderdeel￿van￿NWO)

Foundation

Stichting￿Preferente￿Aandelen￿ASML

FTEs

Full-time￿equivalents

Holistic￿Lithography

Optimize￿the￿scanner￿performance￿by￿taken￿into￿account￿the￿entire￿chip￿creation￿process,￿from
design￿to￿volume￿manufacturing

IASB

IC

IFRS

imec

Intel

International￿Accounting￿Standards￿Board

Integrated￿Circuit

International￿Financial￿Reporting￿Standards

Interuniversitair￿Micro-Elektronica￿Centrum

Intel￿Corporation

Intel￿450mm￿NRE
Funding￿Agreement

Intel￿EUV￿NRE￿Funding
Agreement

Intel￿Investment
Agreement

Agreement￿with￿Intel￿related￿to￿the￿development￿of￿450mm￿lithography￿equipment

Agreement￿with￿Intel￿related￿to￿the￿development￿of￿EUV￿lithography￿equipment

The￿investment￿agreement￿between￿ASML￿and￿Intel

Intel￿NRE￿Funding
Agreements

The￿Intel￿Funding￿Agreements￿related￿to￿the￿development￿of￿450mm￿and￿EUV￿lithography
equipment

Intel￿Stichting

Stichting￿Administratiekantoor￿MAKTSJAB

IRS

KrF

Logic

MBA

Internal￿Revenue￿Service

Krypton￿Fluoride

Micro-processor￿manufacturers￿and￿Foundries

Master￿of￿Business￿Administration

Memory

NAND-Flash￿memory￿and￿DRAM￿memory￿chip￿makers

mm

MPT

NA

Millimeter￿(one￿thousandth￿of￿a￿meter)

Multiple￿Patterning￿Technology

Numerical￿Aperture

NASDAQ

NASDAQ￿Stock￿Market￿LLC

New￿York￿Transfer
Agent

NID

Nikon

J.P.￿Morgan￿Chase￿Bank,￿N.A.,￿4￿New￿York￿Plaza,￿New￿York,￿New￿York

Notional￿Interest￿Deduction

Nikon￿Corporation

Nikon￿Cross-License
Agreement

The￿patent￿Cross-License￿agreement￿between￿Nikon￿and￿ASML￿related￿to￿lithography
equipment￿used￿to￿manufacture￿semiconductor￿devices

ASML￿ANNUAL￿REPORT￿2014

D-2

Name

nm

Description

Nanometer￿(one￿billionth￿of￿a￿meter)

Non-Resident￿Holder

A￿holder￿of￿ordinary￿shares￿who￿is￿not,￿or￿is￿not￿deemed￿to￿be,￿a￿resident￿of￿the￿Netherlands￿for
Dutch￿tax￿purposes

NPV

NRE

Net￿Present￿Value

Non￿Recurring￿Engineering

NRE￿Funding
Agreements

The￿Intel￿NRE￿Funding￿Agreements,￿the￿TSMC￿NRE￿Funding￿Agreement,￿and￿the￿Samsung￿NRE
Funding￿Agreement

NWO

NXE

Dutch￿Organization￿for￿Scientific￿Research￿('Nederlandse￿Organisatie￿voor￿Wetenschappelijk
onderzoek')

NXE￿platform;￿a￿new￿platform￿utilizing￿the￿concepts￿of￿the￿TWINSCAN￿platform￿with￿complete
new￿technologies￿in￿three￿areas:￿light￿source,￿lens￿system,￿and￿vacuum￿body

NXE:3100

NXE:3300B

Second-generation￿EUV￿systems

Third-generation￿EUV￿systems

NXT

OCI

OPC

Participating
Customers

PFIC

PME

Preference￿Share
Option

R&D

RDA

RET

RU

RU￿ASML

RU￿CLS

Samsung

Samsung￿Investment
Agreement

Samsung￿NRE￿Funding
Agreement

TWINSCAN￿NXT￿systems;￿an￿improved￿version￿of￿the￿TWINSCAN￿systems,￿introducing￿new
stages￿and￿stage￿position￿control￿technology,￿which￿enables￿improved￿imaging￿and￿overlay

Other￿Comprehensive￿Income

Optical￿Proximity￿Correction

The￿participants￿in￿the￿Customer￿Co-Investment￿Program:￿Intel￿Corporation￿("Intel"),￿Taiwan
Semiconductor￿Manufacturing￿Company￿Ltd.￿("TSMC")￿and￿Samsung￿Electronics￿Corporation
("Samsung")

Passive￿Foreign￿Investment￿Company

Bedrijfstakpensioenfonds￿Metalektro

An￿option￿to￿acquire￿cumulative￿preference￿shares￿in￿our￿capital

Research￿and￿Development

Research￿and￿Development￿Deduction￿("Research￿and￿Development￿Aftrek")

Resolution￿Enhancement￿Techniques

Reporting￿Unit

Reporting￿Unit￿ASML￿(which￿is￿ASML￿consolidated￿excluding￿RU￿CLS)

Reporting￿Unit￿Cymer￿Light￿Sources

Samsung￿Electronics￿Corporation

The￿investment￿agreement￿between￿ASML￿and￿Samsung

The￿NRE￿funding￿agreement￿between￿ASML￿and￿Samsung

Sarbanes-Oxley￿Act

The￿Sarbanes–Oxley￿Act￿of￿2002￿

SEC

SG&A

The￿United￿States￿Securities￿and￿Exchange￿Commission

Selling,￿General￿and￿Administrative

Shareholder￿Agreement In￿connection￿with￿the￿issuance￿of￿shares￿pursuant￿to￿the￿Intel￿Investment￿Agreement,￿on

September￿12,￿2012￿ASML,￿Intel￿and￿the￿Intel￿Stichting￿entered￿into￿a￿shareholder￿agreement
(we￿refer￿to￿page￿F-48￿)

SMO

STI

Source-Mask￿Optimization

Short-term￿incentive

the￿Intel￿Investment
Agreement

The￿investment￿agreement￿between￿ASML￿and￿Intel

TPE

Third-Party￿Evidence

Transfer￿Agent
Agreement

Agreement￿about￿transfer,￿registrar￿and￿dividend￿disbursement

ASML￿ANNUAL￿REPORT￿2014

D-3

Name

TSMC

TSMC￿Investment
Agreement

TSMC￿NRE￿Funding
Agreement

Description

Taiwan￿Semiconductor￿Manufacturing￿Company￿Ltd.

The￿investment￿agreement￿between￿ASML￿and￿TSMC

The￿NRE￿funding￿agreement￿between￿ASML￿and￿TSMC

TSMC￿Stichting

Stichting￿Administratiekantoor￿TSMC

US￿GAAP

Generally￿accepted￿accounting￿principles￿in￿the￿United￿States￿of￿America￿

UvA

VAT

VIE

University￿of￿Amsterdam

Value-added￿tax￿

Variable￿interest￿entity

VIE￿Shareholders

Syndicate￿of￿three￿banks￿formed￿solely￿for￿the￿purpose￿of￿leasing￿the￿headquarter￿in￿Veldhoven

VLSI￿Research

An￿independent￿industry￿research￿firm￿that￿surveyed￿customers￿representing￿95.0￿percent￿of￿the
world’s￿total￿semiconductor￿market

VSOE

VU

WACC

Wavelength

Vendor-Specific￿Objective￿Evidence

VU￿University￿Amsterdam

Weighted￿Average￿Cost￿of￿Capital

The￿frequency￿of￿light￿going￿through￿projection￿lenses;￿the￿shorter￿the￿wavelength,￿the￿smaller
the￿line-width￿and￿the￿finer￿the￿pattern￿on￿the￿IC

Works￿Council

Works￿Council￿of￿ASML￿Netherlands￿B.V.

YieldStar

Zeiss

Advanced￿wafer￿metrology￿system

Carl￿Zeiss￿SMT￿AG

ASML￿ANNUAL￿REPORT￿2014

D-4

20